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Results
30-Oct-21
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Analysis
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REC
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Asset quality improves, disbursements and loan growth ease on high base
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Rural Electrification
Corporation (REC) has reported 25% increase in the net profit to Rs 2738.79 crore
for the quarter ended September 2021 (Q2FY2022). The Net Interest Income (NII) surged
33% to Rs 4476.59 crore. The loan book growth was in double digit at 11% end
September 2021. The gross profit increased 26%.
Income from
Operations increased 14% to Rs 10039.14 crore for the quarter ended September
2021. The interest expense moved up 3% to Rs 5562.55 crore, pushing up the NII
by 33% to Rs 4476.59 crore in quarter ended September 2021. Other income jumped
228% to Rs 39.68 crore. The total income increased 34% to Rs 4516.27 crore in
the quarter ended September 2021.
The operating
expenses were Rs 11.09 crore, while provisions jumped 41% to Rs 1118.51 crore
in the quarter ended September 2021. The Profit before Tax rose 22% to Rs 3382.02
crore in the quarter ended September 2021. The effective tax rate declined 200 bps
yoy to 19.0%. The Net Profit rose 25% to Rs 2738.79 crore in the quarter ended
September 2021.
Business highlights:
Outstanding loan
portfolio increased 11% to Rs 387277 crore at end September 2021. Disbursements
declined 25% yoy to Rs 21730 crore in Q2FY2022, as disbursements in the T&D
(including RGGVY) declined 19% to Rs 16592 crore, while generation segment
disbursements dipped 38% at Rs 4199 crore. However, short-term loans
disbursements zoomed 291% to Rs 450 crore in Q2FY2022.
The disbursements and
loan growth of the company has eased in Q2FY2022 over Q2FY2021 on account of disbursements
of loans to discoms under liquidity infusion scheme of the government.
Sanctions declined 75%
to Rs 17198 crore in Q2FY2022, driven by decline in generation loans sanction
by 35% to Rs 3185 crore, while the sanctions to T&D segment also dipped 88%
to Rs 6899 crore in Q2FY2022.
With the decline in cost
of funds, NIM moved up 28 bps qoq and 31 bps yoy to 4.50% in quarter ended
September 2021. Yield on loans declined 40 bps yoy to 10.59%, while cost of
funds fell 44 bps yoy to 6.73% in Q2FY2022.
Fund raising declined
26% to Rs 13503 crore in the quarter ended September 2021, of which Capital
gains bonds served Rs 1816 crore, while about Rs 7437 crore were raised through
foreign currency borrowings in Q2FY2022.
Outstanding
borrowings increased by 11% from Rs 332693 crore at end September 2021. Institutional
bonds increased 4% to Rs 172618 crore, capital gains, Tax Free & Infra
bonds were up 1% to Rs 33884 crore and foreign currency borrowing moved up 13% to
Rs 55758 crore at end September 2021.
Total Assets
increased by 12% from Rs 414294 crore at end September 2021 up from Rs 371029 crore
at end September 2020.
Asset Quality
Gross NPA stood at Rs
18,211 crore at end September 2021, while Net NPAs were Rs 5895 crore at end
September 2021. GNPA and NNPA ratio’s stood at 4.70% and 1.52% at end September
2021 compared with 4.80% and 1.61% a quarter ago and 5.22% and 2.04% at end
September 2020.
Book value of the company stood at Rs 239.0 per share
at end September 2021, while adjusted Book value (factoring in NNPA) stood at Rs 209.2 per share at end September 2021.
Financial Performance
H1FY2022
For the half year
ended September 2021 (H1FY2022), REC reported 14% increase in Income from
Operations at Rs 19545.5 crore, while interest expense increased 5% to Rs 11151.11
crore, leading to a 27% rise in NII to Rs 8394.39 crore. Other income moved up 231%
to Rs 44.44 crore. The Staff cost moved up 21% to Rs 81.88 crore, while the
other expenditure rose 5% to Rs 309.46 crore. The depreciation stood at Rs 7.46
crore in H1FY2022 compared with Rs 4.64 crore in H1FY2021. Provision for bad
debts and standard assets jumped 92% to Rs 1899.95 crore in H1FY2022. Profit
before Tax stood at Rs 6140.08 crore, indicating an increase of 17% on a yoy
basis. An effective tax rate stood at 22.3% in H1FY2022 compared with 30.0% in
H1FY2021. The net profit of the company increased 24% to Rs 4985.39 crore in
H1FY2022.
Rural
Electrification Corporation: Results
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Particulars
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2109 (3)
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2009 (3)
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Var %
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2109 (6)
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2009 (6)
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Var %
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2103 (12)
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2003 (12)
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Var %
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Income
from Operations
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10039.14
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8779.38
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14
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19545.50
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17200.15
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14
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35387.89
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29765.21
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19
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Interest
& Finance Expenses
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5562.55
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5411.96
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3
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11151.11
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10604.97
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5
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21489.08
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18997.05
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13
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NII
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4476.59
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3367.42
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33
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8394.39
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6595.18
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27
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13898.81
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10768.16
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29
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Other
Income
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39.68
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12.08
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228
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44.44
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13.43
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231
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22.55
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63.92
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-65
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Total
Income
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4516.27
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3379.50
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34
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8438.83
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6608.61
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28
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13921.36
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10832.08
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29
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Staff
Cost
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42.52
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36.84
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15
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81.88
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67.58
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21
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144.84
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175.79
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-18
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Other
Expenditure
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-31.43
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-226.25
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-86
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309.46
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294.06
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5
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591.24
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2773.44
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-79
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Gross
Profit
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4505.18
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3568.91
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26
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8047.49
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6246.97
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29
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13185.28
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7882.85
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67
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Depreciation
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4.65
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2.26
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106
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7.46
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4.64
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61
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9.53
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10.00
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-5
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Provisions
and Write-off
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1118.51
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793.40
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41
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1899.95
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992.02
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92
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2419.62
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889.56
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172
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Profit
before tax
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3382.02
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2773.25
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22
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6140.08
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5250.31
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17
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10756.13
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6983.29
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54
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Tax
expense
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643.23
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583.05
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10
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1154.69
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1221.09
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-5
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2394.35
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2097.13
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14
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PAT
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2738.79
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2190.20
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25
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4985.39
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4029.22
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24
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8361.78
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4886.16
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71
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EPS
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55.5
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44.4
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50.5
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40.8
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42.34
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24.74
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*
Annualized on current equity of Rs 1974.92 crore. Face Value: Rs 10, Figures
in Rs crore
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Source:
Capitaline Corporate Database
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