REC Limited Earnings Summary — Q1 FY2027
REC Ltd Reports Q1 FY27 Net Profit of ₹4,193 Crore and Announces Interim Dividend of ₹4.25
Quarterly Business Intelligence
AI Quarterly Scorecard™
Computed deterministically from the last 10 reported quarters.
Quarterly Business Momentum
- Revenue declined 0.9% sequentially in Q1 FY2027.
- Revenue of ₹14,435 Cr is 2.1% lower year-on-year.
- Revenue has compounded at 5.9% annualised over the last 10 quarters.
- Net profit of ₹4,193 Cr is 6.1% below the same quarter last year.
- Profit growth is trailing revenue growth this quarter.
- Net profit has compounded at 1.2% annualised across the period.
- Operating margin stands at 96.9% in Q1 FY2027.
- Operating margin compressed by 163 bps year-on-year.
- Over the last two years operating margin has expanded by 238 bps.
- PBT margin is 36.5%.
- Expenses grew 106.2% against revenue growth of -2.1%.
- Operating profit of ₹13,988 Cr is 3.7% lower year-on-year.
- Operating leverage has been under pressure recently.
- 4 of the last 6 measured quarters delivered year-on-year revenue growth.
- Overall quarterly business momentum scores 60/100 (Healthy) on the latest 10 quarters.
- Business momentum has softened and warrants monitoring.
Quarterly Financials
Last 10 Reported Quarters • All figures in ₹ Crore • Margins in %
| Metric | Trend | Latest Q1 FY2027 | Q4 FY2026 | Q3 FY2026 | Q2 FY2026 | Q1 FY2026 | Q4 FY2025 | Q3 FY2025 | Q2 FY2025 | Q1 FY2025 | Q4 FY2024 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | Stable | 14,435 | 14,564 | 15,051 | 15,153 | 14,737 | 15,334 | 14,272 | 13,682 | 13,079 | 12,677 |
| Expenses | Improving | 447 | 1,231 | 655 | 476 | 217 | 1,084 | 263 | 97 | 717 | -425 |
| Operating Profit | Stable | 13,988 | 13,333 | 14,397 | 14,677 | 14,521 | 14,250 | 14,009 | 13,585 | 12,362 | 13,102 |
| Operating Margin | Stable | 96.9% | 91.5% | 95.7% | 96.9% | 98.5% | 92.9% | 98.2% | 99.3% | 94.5% | 103.3% |
| Other Income | Volatile | 35 | 20 | -11 | 10 | 87 | 15 | 15 | 24 | 14 | 29 |
| Interest | Stable | 8,748 | 8,931 | 9,243 | 9,131 | 8,934 | 8,768 | 8,837 | 8,506 | 8,020 | 7,896 |
| Depreciation | Stable | 7 | 7 | 7 | 7 | 7 | 6 | 6 | 6 | 6 | 6 |
| Profit Before Tax | Stable | 5,268 | 4,415 | 5,136 | 5,549 | 5,666 | 5,490 | 5,181 | 5,097 | 4,349 | 5,229 |
| Tax | Stable | 1,076 | 1,039 | 1,084 | 1,134 | 1,201 | 1,180 | 1,105 | 1,060 | 889 | 1,150 |
| Net Profit | Stable | 4,193 | 3,375 | 4,052 | 4,415 | 4,466 | 4,310 | 4,076 | 4,038 | 3,460 | 4,079 |
| Net Margin | Stable | 29.1% | 23.2% | 26.9% | 29.1% | 30.3% | 28.1% | 28.6% | 29.5% | 26.5% | 32.2% |
Key Takeaways
- REC reported a consolidated net profit of ₹4,192.76 crore for Q1 FY27, showing a significant sequential recovery (24% QoQ) despite a slight year-on-year decline.
- The Board approved a major merger by absorption of REC Limited into its promoter, Power Finance Corporation (PFC), with a share exchange ratio of 88 PFC shares for every 100 REC shares.
- Declared 1st Interim Dividend of ₹4.25 per share for FY 2026-27, with a record date of July 31, 2026.
- Asset quality remains exceptionally strong for the sector, with Gross Credit Impaired Assets at a low of 0.23% and Net Credit Impaired Assets at 0.11%.
- Net Worth has grown to ₹92,643.52 crore on a consolidated basis, reflecting a robust capital position with a CRAR of 23.06%.
- Impairment on financial instruments saw a net reversal (gain) of ₹966.58 crore during the quarter, significantly boosting the bottom line compared to the prior quarter's charge.
Management Guidance
Management is focusing on diversifying the loan book into non-power infrastructure and logistics while supporting India's Net Zero targets through renewable energy financing. The strategic merger with PFC is intended to consolidate the market position and optimize capital structures, with an appointed date for the merger set for April 1, 2027.
Sentiment Shift
Improving
While YoY revenue and profit are slightly lower, the massive sequential jump in profitability and extremely low NPA levels indicate strong operational health. The merger announcement provides long-term structural clarity.
Outlook
The outlook is dominated by the upcoming merger with PFC, which will create a massive infrastructure financing entity. Operational performance remains anchored by strong interest income and declining credit costs as legacy stressed assets are resolved.
From the Annual Report (Key Quotes)
“The share exchange ratio shall be 88 equity shares of face value of ₹10/- each of PFC Limited for every 100 equity shares of face value of ₹10/- each of REC Limited.”
“Interest and other income on credit-impaired loan assets is not being recognised as a matter of prudence.”
“The Company's operation comprise of only one business segment - lending to power, logistics and infrastructure sector.”
Official Quarterly Documents
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This summary is AI-generated from REC Limited's latest quarterly filing and earnings call. For informational purposes only — not investment advice.