Business highlights:

Outstanding loan portfolio continues rise at a strong pace of 14% to Rs 330788 crore at end June 2020. Disbursements fell 2% yoy to Rs 15271 crore in Q1FY2021, as disbursements in the T&D (including RGGVY) declined 3% to Rs 9230 crore and short-term loans disbursements also fell 53% to Rs 425 crore. However, the generation segment disbursements moved up 25% at Rs 5002 crore in Q1FY2021.

Sanctions zoomed 73% to Rs 41959 crore in Q1FY2021, driven by surge in generation loans sanction by 197% to Rs 17930 crore, while the sanctions to T&D segment also jumped 6% to Rs 15822 crore in Q1FY2021.

NIM improved 12 bps yoy to 3.68% in quarter ended June 2020. Yield on loans declined 1 bps yoy to 10.53%, while cost of funds fell 33 bps yoy to 7.19% in Q1FY2021.

Fund raising surged 161% to Rs 25497 crore in the quarter ended June 2020, of which Rs 12890 crore raised through institutional bonds. Capital gains bonds served Rs 860 crore, while about Rs 8482 crore were raised through foreign currency borrowings in Q1FY2021.

Outstanding borrowings increased by 20% from Rs 297420 crore at end June 2020. Institutional bonds increased 19% to Rs 168590 crore and foreign currency borrowing moved up 78% to Rs 51731 crore at end June 2020. The capital gains, Tax Free & Infra bonds declined 5% to Rs 34372 crore

Total Assets increased by 18% from Rs 365595 crore at end June 2020 up from Rs 309221 crore at end June 2019.

Asset Quality

Gross NPA stood at Rs 20,211 crore at end June 2020, while Net NPAs were Rs 9521 crore at end June 2020. GNPA and NNPA ratio's stood at 6.11% and 2.88% at end June 2020 compared with 6.59% and 3.32% a quarter ago and 7.18% and 3.72% at end June 2019.

Book value of the company stood at Rs 189.3 per share at end June 2020, while adjusted Book value (factoring in NNPA) stood at Rs 141.1 per share at end June 2020.

Quarterly Performance

Income from Operations increased 24% to Rs 8420.77 crore for the quarter ended June 2020. The interest expense moved up 14% to Rs 5193.02 crore, pushing up the NII by 45% to Rs 3227.75 crore in quarter ended June 2020. Other income dipped 55% to Rs 1.35 crore. The total income increased 45% to Rs 3229.10 crore in the quarter ended June 2020.

The operating expenses moved up 269% to Rs 551.05 crore, while provisions jumped to Rs 198.62 crore in the quarter ended June 2020.

The Profit before Tax rose 18% to Rs 2477.05 crore in the quarter ended June 2020. The effective tax rate declined 282 bps yoy to 25.8%. The Net Profit rose 22% to Rs 1839.01 crore in the quarter ended June 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.