 "REC net profit rises 13% in Dec quarter on improved asset quality")
State-owned power sector lender REC posted a 13 per cent jump in its net profit for the quarter ended December 2023. The company recorded a net profit of Rs 3,269 crore for the third quarter (Q3) of the current financial year, compared to Rs 2,878 crore during the corresponding period in the previous financial year.
The net income of the company stood at Rs 4,350 crore in Q3 of 2023-24 (FY24), up from Rs 3,573 crore in Q3 of 2022-23, registering a jump of 21 per cent.
The company said that due to improving asset quality, an increase in lending rates, and effective management of finance costs, REC recorded its highest-ever nine-month profit of Rs 10,003 crore.
“The loan book has maintained its growth trajectory and has increased by 21 per cent to Rs 4.97 trillion, compared to Rs 4.11 trillion as of December 31, 2022,” said the company in a statement.
REC said its asset quality improved, with net credit-impaired assets at 0.82 per cent during Q3FY24, compared to 1.12 per cent a year before.
REC recently announced its foray into the infrastructure segment. The company’s management said it has sanctioned close to Rs 86,000 crore for infrastructure/non-power projects such as roads, Metro rail, refineries, steel, and irrigation.
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REC to be nodal agency for PM Suryodaya Yojana
Announced on Monday by Prime Minister Narendra Modi, the Pradhan Mantri Suryodaya Yojana will now be implemented by REC.
Speaking during the third quarter results, V K Dewangan, chairman and managing director of REC, has been entrusted with implementing the nationwide solar rooftop scheme, which will include the target of 10 million domestic households announced by Modi.
The scheme will cover all aspects of the current national solar rooftop programme, which has three components — domestic, commercial, and government buildings.
“The board of REC has approved a line of credit of Rs 1.2 trillion for lending to central public sector utilities that will set up rooftop solar projects. Apart from that, REC will deploy its network of 23 regional offices and vendor network to coordinate with stakeholders such as state governments. While the finer details of the scheme are being worked out by the Ministry of New and Renewable Energy, REC will also conduct an awareness programme on the same,” Dewangan said.
The company’s management said the grant and loan portion and the total outlay of the scheme are under work and would require approval from the Union Cabinet.
REC, in the past, has been the nodal agency for various flagship energy access schemes of the Centre, most notably rural electrification under the Deen Dayal Upadhyaya Gram Jyoti Yojana and the Pradhan Mantri Saubhagya scheme. This paper reported REC will take over the rooftop solar scheme to hasten its absorption across the country.