Financial Performance Highlights

H1 FY27 Financial Results:

  • Loan book reached all-time high of INR6.17 lakh crores, representing 6% year-on-year growth
  • Net worth increased to INR94,325 crores, showing 14% year-on-year growth
  • Total income: INR29,068 crores
  • Net interest income: INR10,116 crores
  • Net profit: INR7,541 crores
  • Capital adequacy ratio: 24.04% (against RBI requirement of 15%)

Key Financial Ratios:

  • Yield on loan assets: 9.57% (stable compared to Q1 FY27 at 9.55%)
  • Cost of funds: 7.19%
  • Spread: 2.38%
  • Net interest margin: 3.22%
  • Return on equity: 16.89%
  • Interest coverage ratio: 1.52x
  • Debt equity: 5.6x

Operational Performance

Disbursements:

  • H1 FY27 disbursements: INR56,457 crores (67% growth over Q1 FY27)
  • Q2 FY27 disbursement breakdown:
  • Conventional generation: 11%
  • Renewable energy: 17%
  • Distribution: 22%

Loan Portfolio Composition:

  • Outstanding loan assets growth: 6% from March 31, 2026
  • Portfolio segmentation growth from March 31, 2026:
  • Conventional generation: 4% growth
  • Renewable energy: 15% growth
  • Infrastructure and logistics: 6% growth (now constitutes 10% of portfolio)

Borrowings:

  • Total borrowings: INR5.27 lakh crores (4% growth from March 31, 2026)

Asset Quality

Credit Quality Metrics:

  • Gross credit-impaired assets: 0.22%
  • Net credit-impaired assets: 0.11% (reduced by 50% from 0.24% year-on-year)
  • Provision coverage ratio: 51% on NPA assets
  • No new NPAs for last 19 quarters
  • All current NPAs in private sector

Stage-wise Asset Classification:

  • Stage 1 assets: 99.26% of portfolio with 0.85% provision
  • Stage 2 assets: Reduced from INR12,350 crores (June 30) to INR3,235 crores (80% reduction) with 4.5% provision

Additional Reserves:

  • Statutory reserves under RBI Act 45-IC: INR18,736 crores
  • Income Tax Act reserves: INR1,200 crores

Shareholder Returns

Dividend History:

  • Last year dividend: INR18.55 per share (face value INR10)
  • Current year total dividend declared: INR7.75 per share
  • Q2 FY27 dividend: INR3.50 per share
  • Maintains 30% dividend payout ratio as mandated by Government of India

Shareholding Pattern:

  • Foreign institutional investors shareholding increased from 15.76% (June 30) to 16.78% (September 30)

Per Share Metrics:

  • Earnings per share (annualized): INR57.27
  • Book value per share: INR358.21
  • Current market price trading at discount to book value

ESG Initiatives

ESG Achievements:

  • Ranked first among 505 Indian financial sector companies in NSE ESG ratings
  • Renewable energy portfolio: INR86,660 crores (3x growth in last 5 years)
  • Renewable portfolio composition:
  • Solar: 35%
  • Pumped storage: 14%
  • Hybrid: 18%
  • Hydro: 13%
  • Targeting to become first carbon-neutral financial organization in India
  • ISO 31000:2018 certification for risk management

Management Guidance and Outlook

Growth Targets:

  • H1 FY27 disbursements: ~INR90,000 crores
  • Full-year FY27 disbursement target: INR2 lakh crores+
  • Expected loan book growth: 10-12% for FY27
  • Already achieved 6% growth in H1 FY27

Market Position:

  • 45% market share in state power utility lending over last 3 years (INR4.5 lakh crores of INR10 lakh crores total)
  • Documented projects pipeline: INR70,000 crores
  • Committed order book: INR2.5 lakh crores

Sector Opportunities:

  • National Electricity Plan projects requiring INR6.67 lakh crores investment by 2031-32
  • REC target funding: INR1.8-2.2 lakh crores for thermal projects by 2032
  • Government transmission sector strengthening project: INR1.85 lakh crores
  • Biogas sector opportunity: INR23,000 crores Cabinet plan

Merger Update

PFC Merger Status:

  • Both Boards passed merger resolution
  • Received NOC from RBI and stock exchanges
  • Draft merger scheme pending Cabinet approval
  • Precondition: merged entity will remain government company with management control
  • Expected merged entity loan book: ~INR12 lakh crores

Q&A Session Highlights

Margin Outlook:

  • Management expects NIMs to remain around 3.22%
  • 25% of loan book is floating rate, providing protection in rising rate environment
  • Competitive pressures acknowledged but REC maintains highest NIMs among peers

Thermal Power Funding:

  • Targeting INR2.5 lakh crores thermal portfolio by 2032 (from current INR1.52 lakh crores)
  • Recent NTPC Meja project: INR27,000 crores disbursement (shared with PFC)

New Business Areas:

  • Actively funding battery storage, pumped hydro, and data centers
  • Exploring opportunities in emerging infrastructure sectors

Credit Cost Guidance:

  • Providing 1% ECL on additional loan book growth
  • INR300 crores additional ECL provided in Q2 for INR26,000 crores loan growth
  • 80% of ECL towards government assets considered as reserves