Finance and M&A

REC Limited Q1 FY 2026-27 Financial Performance Report

August 5, 2026 By Gaurav Nathani 3 min read
0:00 / 03:12

Quarterly Financial Performance Analysis

The company’s Net Interest Income (NII) for the quarter ending June 30, 2026, rose to ₹5,212 crore from ₹4,961 crore in the year-ago period, representing growth of 5.06%. This improvement was facilitated by a 2.0% decline in finance costs. The following table details the core profit and loss metrics for Q1 FY27 compared to Q1 FY26.

Particulars (All figures in INR Crore)Q1 FY26Q1 FY27
Interest Income on Loan assets (including DIPI)13,89513,967
Less: Finance Costs (including fee & comm)8,9348,755
Net Interest Income (NII)4,9615,212
Profit Before Tax (PBT)4,3975,209
Profit After Tax (PAT)3,3624,149

Key Operational Ratios

REC Limited reported the following efficiency and margin metrics for Q1 FY27:

  • Yield on Loan Assets: 9.55%
  • Cost of Funds: 7.02%
  • Interest Spread: 2.53%
  • Net Interest Margin: 3.34%
  • Return on Net Worth: 18.85%
  • Debt Equity Ratio: 5.52

Sectoral Loan Portfolio and Disbursement Breakdown

As of June 30, 2026, the total outstanding loan assets reached ₹5,90,000 crore. The portfolio remains concentrated in the Government Sector, which accounts for 84% of assets (₹4,96,946 crore), while the Private Sector comprises 16% (₹93,054 crore).

The discipline-wise breakdown of loan assets is as follows:

  • Distribution: ₹2,22,895 crore (38%)
  • Conventional Generation: ₹1,49,686 crore (25%)
  • Renewable Energy: ₹78,596 crore (13%)
  • Infrastructure & Logistics: ₹59,289 crore (10%)
  • Transmission: ₹45,345 crore (8%)
  • Revolving Bill Payment Facility (RBPF): ₹17,020 crore (3%)
  • Others: ₹17,169 crore (3%)

The total loan assets excluding the Revolving Bill Payment Facility (RBPF) amounted to ₹5,72,980 crore.

Asset Quality and Provisioning

The total outstanding loan amount of ₹5,90,000 crore is supported by an overall provisioning of ₹5,764 crore. Credit risk mitigation is categorized by sector, with Stage 3 provisioning for the State Sector at 0.98% and the Private Sector at 51.19%.

The company maintains significant capital buffers, including:

  • Statutory Reserve (u/s 45-IC of RBI Act): ₹18,058 crore
  • Reserve for Bad & Doubtful debts (u/s 31(1) of the Income Tax Act, 2025): ₹1,002 crore

Borrowing Profile and Capital Structure

Total outstanding borrowings as of June 30, 2026, stood at ₹5,07,555 crore. The company utilizes a diversified funding base across domestic and international markets:

  • Domestic Borrowings: ₹3,65,434 crore (comprising Bonds, Bank/FI/NSSF Loans, and Commercial Papers)
  • Foreign Currency Borrowings: ₹1,42,121 crore (comprising External Commercial Borrowings and FCNR (B) Loans)

Nearly 99% of total foreign currency borrowings are currently hedged to mitigate exchange rate volatility.

Institutional Ratings and ESG Standing

REC Limited holds the highest domestic credit rating of “AAA.” Its international credit ratings of “Baa3” (Moody’s) and “BBB-” (Fitch/S&P) remain at par with India’s sovereign rating.

The company’s Environmental, Social, and Governance (ESG) performance is monitored by international agencies as follows:

  • Morningstar Sustainalytics: 15.7 (Low Risk category; scale 10-20)
  • MSCI: BBB (Average category; scale BB to A)
  • S&P Global: 39 (Above Industry Average)
  • CDP: B (Management Level; scale B-/B)

Official Sources & Citations

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