Business highlights:

Outstanding loan portfolio continues rise at a strong pace of 15% to Rs 322425 crore at end March 2020. Disbursements moved up 12% yoy to Rs 22205 crore in Q4FY2020, as generation segment disbursements surged 150% at Rs 11996 core and short-term loans disbursements also moved up 32% to Rs 329 core. However, disbursements in the T&D (including RGGVY) declined 32% to Rs 8922 core in Q4FY2020.

Sanctions dipped 33% to Rs 15010 crore in Q4FY2020, driven by decline in generation loans sanction by 31% to Rs 4803 crore, while the sanctions to T&D segment also fell 33% to Rs 9158 crore in Q4FY2020.

Fund raising declined 1% to Rs 23796 crore in the quarter ended March 2020, of which Rs 16241 crore raised through institutional bonds. Capital gains bonds served Rs 1704 crore, while about Rs 1451 crore were raised through foreign currency borrowings and term loans Rs 4400 core in Q4FY2020.

Outstanding borrowings increased by 17% from Rs 280116 crore at end March 2020. Institutional bonds increased 17% to Rs 158148 crore, capital gains, Tax Free & Infra bonds declined 4% to Rs 35040 crore and foreign currency borrowing moved up 49% to Rs 44380 crore at end March 2020.

Total Assets increased by 16% from Rs 346488 crore at end March 2020 up from Rs 297717 crore at end March 2019.

Asset Quality

Gross NPA stood at Rs 21,256 crore at end March 2020, while Net NPAs were Rs 10704 crore at end March 2020. GNPA and NNPA ratio's stood at 6.59% and 3.32% at end March 2020 compared with 6.40% and 3.16% a quarter ago and 7.24% and 3.79% at end March 2019.

Book value of the company stood at Rs 177.6 per share at end March 2020, while adjusted Book value (factoring in NNPA) stood at Rs 123.4 per share at end March 2020.

Quarterly Performance

Income from Operations increased 18% to Rs 7839.4 crore for the quarter ended March 2020. The interest expense moved up 19% to Rs 4941.8 crore, pushing up the NII by 15% to Rs 2897.6 crore in quarter ended March 2020. Other income jumped 292% to Rs 55.28 crore. The total income increased 17% to Rs 2952.88 crore in the quarter ended March 2020.

The operating expenses moved up 97% to Rs 1713.04 crore, while provisions jumped 2928% to Rs 538.46 crore in the quarter ended March 2020. The Profit before Tax dipped 57% to Rs 698.23 crore in the quarter ended March 2020.

The effective tax rate increased 1446 bps yoy to 37.6%. The Net Profit declined 65% to Rs 435.71 crore in the quarter ended March 2020.

Financial Performance FY2020

For the year ended March 2020 (FY2020), REC reported 19% increase in Income from Operations at Rs 29791.06 crore, while interest expense increased 21% to Rs 18997.05 crore, leading to a 16% rise in NII to Rs 10794.01 crore. Other income moved up 103% to Rs 63.92 crore. The Staff cost moved up 12% to Rs 175.79 crore, while the other expenditure surged 231% to Rs 2799.29 crore. The Depreciation stood at Rs 10.00 crore in FY2020 compared with Rs 7.17 crore in FY2019, while Provision for bad debts and standard assets jumped 270% to Rs 889.56 crore in FY2020. Profit before Tax declined 14% to Rs 6983.29 core. An effective tax rate stood at 30.0% in FY2020 compared with 28.8% in FY2019. The net profit of the company declined 15% to Rs 4886.16 crore in FY2020.