REC net up 37 pc at Rs 1,468.7 cr in April-June quarter

State-run Rural Electrification Corporation (REC) posted about 37 per cent jump in its net profit at Rs 1,468.70 crore for the April-June quarter compared to the year ago period on higher revenues and lower impairments.

The company's standalone net profit in the quarter ended on June 30, 2017, was Rs 1,075.96 crore, REC said in a statement.

The company has adopted Indian Accounting Standards (Ind-AS)from this fiscal and presented its first Ind-AS Compliant financial results.

The total income of the company was Rs 6,319 crore in the first quarter, up from Rs 5,628 crore year ago.

The Earnings per Share (EPS) during the first quarter of FY2019 has also increased to Rs 7.44, in comparison to EPS of Rs 5.45 during the year-ago quarter, it said.

In spite of the challenging business environment, the loan book of the company has shown a healthy increase of 16 per cent and has grown to Rs 2.42 lakh crore as at June 30 2018, as against Rs 2.08 lakh crore as at June 30 2017, it added.

The loan quality has always been a key focus area of the company. Considering the paradigm shift in the loan provisioning methodology under the Indian Accounting Standards, the Expected Credit Loss (ECL) evaluation & calculation was undertaken through an independent agency, IRR Advisory Services Pvt. Ltd., a Fitch Ratings Group Company.

Consequent to the implementation of ECL methodology, the Provision Coverage Ratio against the credit-impaired assets has improved to 47.41 per cent as at June 30 2018.

The Net NPA levels have also fallen to 4.27 per cent in April-June 2018 as compared to 5.68 per cent as per IGAAP in the last quarter of 2017-18. Further, there are no indications of credit impairment in the loans to government sector, forming 86 per cent of the loan book, it added.

Commenting on results, Dr. P V Ramesh, Chairman and Managing Director REC said in statement, The Company has delivered a steady performance during the current quarter, even while the domestic and global factors have been challenging. Our focus continues to be on the renewable segment which is emerging as a major driver for sustainable growth. We also continue to remain optimistic about the resolution of the stressed assets.