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Results
14-May-22
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Analysis
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REC
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Asset quality and margin improves, loan growth eases
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Rural
Electrification Corporation (REC) has reported 11% increase in the net profit
to Rs 2287.88 crore for the quarter ended March 2022 (Q4FY2022). The Net
Interest Income (NII) rose at healthy pace of 14% to Rs 4227.02 crore, driven
by improved Net Interest Margin (NIM). However, the loan book growth moderated
on account of high base to 2% end March 2022. The gross profit growth moderated
to 6%. Further, the provisions for restructured advances as well as taxes were
higher causing moderation in PBT growth in Q4FY2022.
Business highlights:
Outstanding loan
portfolio rose 2% to Rs 385371 crore at end March 2022. Disbursements declined 49%
yoy to Rs 15486 crore in Q4FY2022, as disbursements in the T&D (including
RGGVY) plunged 55% to Rs 8887 crore, while generation segment disbursements
declined 43% at Rs 5442 crore. Short-term loans disbursements also fell 19% to
Rs 243 crore in Q4FY2022.
Sanctions fell 37% to
Rs 10824 crore in Q4FY2022, driven by decline in generation loans sanction by 53%
to Rs 2296 crore, while the sanctions to T&D segment also declined 72% to
Rs 2869 crore in Q4FY2022.
NIM was up 8 bps yoy
to 4.15% in quarter ended March 2022. Yield on loans declined 16 bps yoy to 10.11%,
while cost of funds fell 40 bps yoy to 6.67% in Q4FY2022.
Fund raising declined
62% to Rs 11519 crore in the quarter ended March 2022, of which capital gains
bonds served Rs 2512 crore, while about Rs 2457 crore were raised through
foreign currency borrowings in Q4FY2022. Bank borrowings of Rs 6550 crore were
also raised in Q4FY2022.
Outstanding
borrowings rose 1% from Rs 326844 crore at end March 2022. Institutional bonds
increased declined 15% to Rs 152692 crore, while capital gains, Tax Free &
Infra bonds were up 21% to Rs 37251 crore and foreign currency borrowing moved
up 39% to Rs 65957 crore at end March 2022.
Total Assets
increased by 3% from Rs 410413 crore at end March 2022 up from Rs 400233 crore
at end December 2020.
Asset Quality
Gross NPA stood at Rs
17,160 crore at end March 2022, while Net NPAs were Rs 5594 crore at end March
2022. GNPA and NNPA ratio’s stood at 4.45% and 1.45% at end March 2022 compared
with 5.07% and 1.74% a quarter ago and 4.84% and 1.71% a year ago.
Book value of the company stood at Rs 255.3 per share at
end March 2022, while adjusted Book value (net of NNPA) stood at Rs 227.0 per
share at end March 2022.
Quarterly Performance
Income from
Operations increased 5% to Rs 9580.1 crore for the quarter ended March 2022. The
interest expense declined 2% to Rs 5353.08 crore, pushing up the NII by 14% to
Rs 4227.02 crore in quarter ended March 2022. Other income jumped 408% to Rs 21.47
crore. The total income increased 14% to Rs 4248.49 crore in the quarter ended
March 2022.
The operating
expenses moved up 108% to Rs 655.60 crore, while provisions rose 8% to Rs 754.34
crore in the quarter ended March 2022. The Profit before Tax gained 5% to Rs 2833.12
crore in the quarter ended March 2022. The effective tax rate declined 398 bps
yoy to 19.2% . The Net Profit rose 11% to Rs 2287.88 crore in the quarter ended
March 2022.
Financial Performance
FY2022
For the year ended March
2022 (FY2022), REC reported 11% increase in Income from Operations at Rs 39132.49
crore, while interest expense increased 3% to Rs 22052.91 crore, leading to a 23%
rise in NII to Rs 17079.58 crore. Other income moved up 334% to Rs 97.96 crore.
The Staff cost moved up 10% to Rs 158.86 crore, while the other expenditure
surged 86% to Rs 1102.51 crore. The Depreciation stood at Rs 17.96 crore in
FY2022 compared with Rs 9.53 crore in FY2021. Provision for bad debts and
standard assets jumped 44% to Rs 3473.31 crore in FY2022. Profit before Tax
stood at Rs 12424.90 crore, indicating an increase of 16% on a yoy basis. An
effective tax rate stood at 19.1% in FY2022 compared with 22.3% in FY2021. The
net profit of the company increased 20% to Rs 10045.92 crore in FY2022.
Rural
Electrification Corporation: Results
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Particulars
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2203 (3)
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2103 (3)
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Var %
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2203 (12)
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2103 (12)
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Var %
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Income
from Operations
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9580.10
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9145.61
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5
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39132.49
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35387.89
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11
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Interest
& Finance Expenses
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5353.08
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5438.14
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-2
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22052.91
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21489.08
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3
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NII
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4227.02
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3707.47
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14
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17079.58
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13898.81
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23
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Other
Income
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21.47
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4.23
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408
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97.96
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22.55
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334
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Total
Income
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4248.49
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3711.70
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14
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17177.54
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13921.36
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23
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Staff
Cost
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36.07
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34.62
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4
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158.86
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144.84
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10
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Other
Expenditure
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619.53
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281.02
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120
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1102.51
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591.24
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86
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Gross
Profit
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3592.89
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3396.06
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6
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15916.17
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13185.28
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21
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Depreciation
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5.43
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2.65
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105
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17.96
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9.53
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88
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Provisions
and Write-off
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754.34
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697.64
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8
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3473.31
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2419.62
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44
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Profit
before tax
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2833.12
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2695.77
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5
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12424.90
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10756.13
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16
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Tax
expense
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545.24
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626.14
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-13
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2378.98
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2394.35
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-1
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PAT
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2287.88
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2069.63
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11
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10045.92
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8361.78
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20
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EPS
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46.3
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41.9
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50.87
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42.34
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Adj
BV (Rs)
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227.0
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184.3
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227.02
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184.34
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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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