State-run REC on Tuesday reported a consolidated net profit of ₹4,079 crore in Q4 FY24, which is higher by 33 per cent year-on-year (y-o-y) and by 23 per cent quarter-on-quarter (q-o-q) due to improving asset quality, resetting of lending rates and effective management of finance costs.
The power sector NBFCs consolidated total income rose to ₹12,707 crore in Q4 FY24 compared to ₹12,072 crore in Q3 FY24 and ₹10,255 crore in Q4 FY23.
REC’s Board of Directors recommended a final dividend of around ₹5 per equity share for FY24, subject to approval of shareholders. The total dividend for the financial year is ₹16 a share.
Financial growth spurt
The Maharatna company said that, on a standalone basis, its yields stood at 10.03 per cent in Q4 FY24 against 9.65 per cent a year-ago. The average cost of funds was 7.14 per cent against 7.17 per cent during the same period.
Its net interest margin for Q4 FY24 was 3.60 per cent compared to 3.29 per cent in Q4 FY23. The return on net worth stood at 24.06 per cent against 21.34 per cent a year-ago.
“Owing to the improving asset quality and effective resolution of stressed assets, resetting of the lending rates and effective management of Finance Cost, REC is able to record its highest ever annual profit after tax of ₹14,019 crore (standalone),” it said.
Asset quality improvement
The loan book has maintained its growth trajectory and has increased by 17 per cent to ₹5.09-lakh crore as of March 31, 2024, as against ₹4.35-lakh crore as of March 31, 2023. Signifying improving asset quality, the net credit-impaired assets as of March 2024 have reduced to 0.86 per cent from 1.01 per cent as of March 2023 with provision coverage ratio of 68.45 per cent on NPA assets, as of March 31, 2024.
Indicating the ample opportunity to support the future growth, the capital adequacy ratio (CRAR) of the company stands at a comfortable 25.82 per cent as of March 31, 2024, it added.
Aided by growth in profits, the net worth has grown to ₹68,783 crore as on March 31, 2024, registering an increase of 19 per cent y-o-y.
For FY24, REC reported a consolidated net profit of ₹14,146 crore compared to ₹11,167 crore in FY23. Consolidated total income stood at ₹47,571 crore compared to ₹39,520 crore a year-ago.