Shares of REC Ltd hit their record high in intraday deals on Thursday after the company reported its highest quarterly profit for the September quarter of FY24 (Q2FY24).
The company reported a 38.71 percent year-over-year increase in its consolidated net profit for the quarter ended September to ₹3,789.90 crores against ₹2,732.12 crores.
“Due to the improving quality of assets, increase in loan accounts and effective management of Finance Cost, REC can record its highest ever quarterly profit,” the state-owned power company’s financial sector said in a statement.
The supply rose as much as 8.6 percent to its new record high of ₹307.35 in intraday deals today. It has now rallied over 213 percent from its 52-week low of ₹98.10, hit November 10, 2022.
The stock has given multibagger returns in the last 1 year as well as in 2023 YTD. It has risen 174 percent in the last 1 year and 164 percent in 2023 YTD, giving positive returns in 9 of the 10 months of this year so far. It was red only in February, down 6.12 percent. Meanwhile, it has risen for 8 straight months since March 2023, soaring nearly 152 percent between March and October.
During the period under review, loans are worth ₹1.04 lakh crore was sanctioned, up from ₹84,889 crore sanctioned a year ago. Loans for renewable energy projects accounted for 24 percent of the total sanctions.
The company’s loan book increased 20 percent to ₹4.74 lakh crores of ₹3.94 lakh crore in the year-ago period.
“Signifying an improvement in asset quality, the net credit-impaired assets have reduced to 0.96 percent with a provisional coverage ratio of 69.37 percent on NPA assets, as on September 30, 2023,” the company noted.
The capital adequacy ratio (CRAR) of the company, which mostly lends to the power sector, also stood at a comfortable 28.53 percent at the end of September. The company has diversified into the infrastructure and logistics sector in a major way, since becoming a Maharatna company in September 2022.
The company’s board of directors also approved an interim dividend of ₹3.50 per equity share of ₹10 each for the FY24.
REC’s business activities involve financing projects in the complete value chain of the electricity sector, be it generation, transmission or distribution. It provides financial assistance to state electricity boards, state governments, central/state electricity utilities, independent power producers, rural electric cooperatives and private sector utilities through its extensive network of 22 offices nationwide.