Business highlights:

Outstanding loan portfolio continues rise at a strong pace of 20% to Rs 291069 crore at end June 2019. Disbursements surged 88% yoy to Rs 15625 crore in Q1FY2020, as disbursements in the T&D (including RGGVY) jumped 131% to Rs 9500 crore, while generation segment disbursements galloped 97% at Rs 4002 crore. The short-term loans disbursements also jumped 29% to Rs 900 crore in Q1FY2020.

Sanctions surged 29% to Rs 24288 crore in Q1FY2020, driven by surge in generation loans sanction by 120% to Rs 6034 crore, while the sanctions to T&D segment also jumped 20% to Rs 14884 crore in Q1FY2020.

NIM declined 9 bps qoq and 13 bps yoy to 3.59% in quarter ended June 2019. Yield on loans increased 22 bps yoy to 10.54%, while cost of funds moved up 25 bps yoy to 7.52% in Q1FY2020.

Fund raising increased 700% to Rs 9771 crore in the quarter ended June 2019, of which Rs 8032 crore raised through institutional bonds and capital gains bonds served Rs 1264 crore in Q1FY2020.

Outstanding borrowings increased by 23% from Rs 246896 crore at end June 2019. Institutional bonds increased 10% to Rs 141542 crore, capital gains, Tax Free & Infra bonds declined 1% to Rs 36257 crore and foreign currency borrowing moved up 7% to Rs 29073 crore at end June 2019.

Total Assets increased by 26% from Rs 309221 crore at end June 2019 up from Rs 245214 crore at end June 2018.

Asset Quality

Gross NPA stood at Rs 20,892 crore at end June 2019, while Net NPAs were Rs 10819 crore at end June 2019. GNPA and NNPA ratio's stood at 7.18% and 3.72% at end June 2019 compared with 7.24% and 3.79% a quarter ago and 8.12% and 4.27% at end June 2018.

Book value of the company stood at Rs 181.8 per share at end June 2019, while adjusted Book value (factoring in NNPA and 25% of restructured advances) stood at Rs 127.1 per share at end June 2019.

Quarterly Performance

Income from Operations increased 11% to Rs 6986.19 crore for the quarter ended June 2019. The interest expense moved up 26% to Rs 4572.57 crore, causing 11% decline in the NII to Rs 2413.62 crore in quarter ended June 2019. Other income surged 95% to Rs 3.00 crore. The total income declined 10% to Rs 2416.62 crore in the quarter ended June 2019.

The operating expenses dipped 67% to Rs 149.45 crore, while provisions increased 23% to Rs 163.08 crore in the quarter ended June 2019. The Profit before Tax was flat at Rs 2102.00 crore in the quarter ended June 2019.

The effective tax rate declined 185 bps yoy to 28.6%. The Net Profit rose 2% to Rs 1501.34 crore in the quarter ended June 2019.

Annual Financial Performance

For the year ended March 2019 (FY2019), REC reported 13% increase in Income from Operations at Rs 25309.72 crore, while interest expense increased 17% to Rs 15641.54 crore, leading to a 6% rise in NII to Rs 9668.18 crore. Other income moved up 147% to Rs 31.44 crore. The staff cost declined 9% to Rs 157.53 crore, while the other expenditure surged 328% to Rs 845.57 crore. The depreciation stood at Rs 7.17 crore in FY2019 compared with Rs 5.65 crore in FY2018, while provision for bad debts and standard assets declined 79% to Rs 588.85 crore in FY2019. Profit before Tax stood at Rs 8100.50 crore, indicating an increase of 38% on a yoy basis. An effective tax rate stood at 28.8% in FY2019 compared with 24.9% in FY2018. The net profit of the company increased 30% to Rs 5763.72 crore in FY2019.