REC declared its Q1 FY25 results on July 27
State-run REC ltd declared its Q1 results for the current fiscal on Saturday. The public sector undertaking (PSU) recorded a 16 per cent jump in net profit at Rs 3,442 crore compared to Rs 2,961 crore in the same period last year. The company’s total income also saw a 19 per cent rise to reach Rs 13,037 crore.
The firm’s management attributed the healthy growth to the pick up in the pace of sanctions and disbursals in the renewable energy segment. Sector-wise breakdown of sanctions showed that renewables (including hydro projects) made up 35 per cent of the total sanctions in the first quarter. Out of the total Rs 1,12,791 crore in Q1 FY25, renewables sanctions stood at Rs 39,655 crore more than 59 per cent of the sanctions in the same period last fiscal.
Total sanctions witnessed a growth of 24 per cent while loan disbursements were up 28 per cent led by a 249 per cent rise in renewable projects. The firm has announced an interim dividend of Rs 3.50 per share.
Speaking after the presentation of results, REC Chairman and Managing Director Vivek Kumar Dewangan said that the company is on track to achieve all of its targets. “The growth trajectory which we embarked upon two years ago has been maintained and we are set to witness 15-17% growth in our loan book consistently in the next few years,” he said while speaking to media.
The Green Push
As per the targets mentioned by Dewangan, the company aims to take the share of green energy in its portfolio from around 8 per cent to over 30 per cent by 2030. In the first quarter of this financial year, the company sanctioned loans for a wide variety of renewable projects which include pumped hydro, solar modules, and wind turbines, among others.
Importantly, the company is also the implementing agency for the Rooftop Solar Scheme announced by the government in the interim budget. As part of PM Surya Ghar Muft Bijli Yojana, over 1 crore homes are set to get free electricity up to 300 units post the installation of rooftop solar modules.
Revealing the numbers for the scheme, VK Singh, Director (Technical) at REC, said that over 1 crore applications have been received. As per the numbers provided by the company, 5 lakh rooftop solar modules are set to be installed by the end of August with the pace of installations at 3,000-4,000 per day.
“The momentum is visible across all states. Gujarat is leading the charge but other states such as Kerala, Tamil Nadu and Assam are also witnessing good demand for the scheme,” Singh explained. Around 900 MW of capacity has been installed under the scheme so far.
Traditional Sources Intact
While green energy will be the dominant theme for the company, it is also expected to witness good demand from the traditional thermal power sector. Citing the government’s estimates, the leadership said that Rs 6.67 lakh crore will be needed for thermal capacity addition by 2031-32.
The company is looking to maintain its position in the segment and fund about 50 per cent of the capacity addition. Explaining the dual focus on greening firm’s loan book and ensuring adequate funds for thermal capacity additions, Dewangana said, “In the pursuit of becoming a developed nation, we have to ensure energy security which can meet the country’s power needs.”
Thermal power projects constitutes around 28 per cent of its loan books and the company expects to maintain this share.
The company aims to raise debt of Rs 1.6 lakh crore in the current financial year, of which 30 per cent will be through foreign borrowings route. REC’s share price has surged by over 46 per cent in 2024.