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REC net down 24pc at Rs 1,322 cr in Q2

Press Trust of India  |  New Delhi 

State-run REC's consolidated net profit dropped about 24 per cent to Rs 1,322.47 crore in the quarter ended on September 30, 2019, compared to that of Rs 1,732.75 crore in the year-ago quarter, according to a BSE filing.

Total income of the company rose to Rs 7,483.75 crore in the second quarter from Rs 6,246.05 crore in the same quarter of last year.

The company said that the loan book has continued to grow on sequential basis and has crossed Rs 3 lakh crore during the September quarter.

The loan book of the company has increased to Rs 3.01 lakh crore as at September 30, 2019, as against Rs 2.57 lakh crore as at September 30, 2018, reflecting a growth of 17 per cent.

"The interest coverage ratio of the Company has been at 1.42 with an Earnings per Share (EPS) of Rs 6.62 during Q2 FY20. The Net Worth of the Company stands at Rs 36,837 crores as on September 30, 2019, with a book value per share of Rs 187," it said.

The Capital Adequacy Ratio of the Company continues to stay healthy to support future growth for the Company at 17.70 per cent as at September 30, 2019, as against 16.14 per cent as at September 30, 2018.

The Company has provided an amount of Rs 300 crore towards provisioning during the current quarter, but it has primarily been used to cushion the provisioning coverage ratio against credit-impaired assets (NPAs). As a result, the Provision Coverage Ratio against the credit-impaired assets under the Expected Credit Loss (ECL) framework has improved to 49.40 per cent as at September 30, 2019, it said.

With no incremental slippages, the asset quality has been improving steadily and the Net NPA (bad loans) levels improved from 3.72 per cent as at June 30, 2019 to 3.47 per cent as at September 30, 2019. Further, the loans to government and public sector, forming 88 per cent of the loan book, have not shown any indications of credit impairment.

Talking about the results, Ajeet Kumar Agarwal, Chairman and Managing Director, said in the statement, The sentiments in the power sector has been improving. We saw a resolution sail through in respect of one of the stressed assets during the current quarter and we are hopeful of resolution of some more stressed assets in the coming quarters. With recent Govt. initiatives like payment security mechanism for power generators, we continue to remain optimistic about the sector in the times to come.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, November 05 2019. 20:30 IST
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