REC advances after strong Q1 outcome

REC gained 3.69% to Rs 109.65 after the consolidated net profit rose 22.29% to Rs 1,845.30 crore on 20.44% rise in total income to Rs 8,450.36 crore in Q1 June 2020 over Q1 June 2019.

Consolidated profit before tax came at Rs 2,483.89 crore in Q1 June 2020, rising 17.6% from Rs 2,112.58 crore in Q1 June 2019. Total tax expenses rose 6% year on year to Rs 638.59 crore in Q1 June 2020.

Commenting on COVID-19 impact, REC said that it continues to leverage digital technology for review & monitoring. information-sharing and knowledge management to continue the business operations without any significant disruptions due to lockdown.

The company further added that the management is of the view that there are no reasons to believe the pandemic will have any significant impact on the ability of the firm to continue as a going concern. The company said it granted moratorium as allowed by RBI guidelines. In pursuance of the moratorium policy, an amount of Rs 10,138 crore falling due till 30 June 2020 (including the amount pertaining to the first moratorium period) has been deferred.

Inspite of the moratorium allowed to the borrowers, the company assured that it has not experienced any significant impact on its liquidity position, cushioned by its access to diversified sources of borrowings across the geographies. However, as a matter of abundant caution in the uncertain environment, the company has been maintaining higher levels of liquidity buffers to meet committed liabilities and expected disbursements. As on 30 June 2020, the amount of Cash & Cash equivalents available with the company, including short-term deposits and liquid mutual funds, is Rs 10,394 crore, as against Rs 1,678 crore on 31 March 2020.

Meanwhile, the board of directors of REC approved the proposal of raising of funds through issue of unsecured/secured non-convertible bonds/debentures through Private Placement, upto an amount of Rs 85,000 crore, in one or more tranches, subject to approval of shareholders in this regard in the ensuing Annual General Meeting.

Rural Electrification Corporation (REC) is a Navratna Central Public Sector Enterprise under the Ministry of Power. The company is engaged in the financing and promotion of transmission, distribution and generation projects throughout India.

Powered by Capital Market - Live News