1. REC Q2 profit falls 31% on increased competition

REC Q2 profit falls 31% on increased competition

Rural Electrification Corporation (REC) on Monday reported a 31% fall in its profit for the quarter ended September 30 at Rs 1,214.7 crore, as rising liquidity prompted loan seekers to avail of funding at lower interest rates from other sources.

By: | New Delhi | Published: November 7, 2017 5:03 AM
The state-owned company, which finances the power sector, posted a 7.8% decrease in revenue from operations to Rs 5,492.8 crore. (Reuters)

Rural Electrification Corporation (REC) on Monday reported a 31% fall in its profit for the quarter ended September 30 at Rs 1,214.7 crore, as rising liquidity prompted loan seekers to avail of funding at lower interest rates from other sources. The state-owned company, which finances the power sector, posted a 7.8% decrease in revenue from operations to Rs 5,492.8 crore. In line with the current trend, the company’s yield on loan assets came down to 11.2% from 11.64% in the six months ended September. Concurrently, cost of funds for REC also came to 7.9% from 8.13% in the same period a year ago. PV Ramesh, managing director, said the company received pre-payment to the tune of Rs 42,700 crore till FY17, thanks to the government’s Uday scheme designed to turn around ailing discoms, which constituted loftier baseline numbers of the corresponding quarter last year. Discounting that, Ramesh said the performance in the ongoing financial year is still healthy for an NBFC with an interest coverage ratio of 1.55%.

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