REC Net Jumps By 15% As Spread Increase

The Power Sector financing company Rural Electrification Corporation profit spurted 15% to 1478 crore in Q1FY16 as against Rs 1282 earned during same period last year. Interestingly during this period the company’s total revenue spurted by around 21% and jumped to Rs 5709 crore as against Rs 4707 crore earned during the quarter ending June last year. On one hand company’s other operating income increased from Rs 1776 crore to Rs 2125 crore, whereas the expenditure reached to 277 crore.

During this period, the company’s interest outgo reached Rs. 3306 crore as against Rs. 2752 crore spent during Q1FY15, clearly showing strained flow of funds in the market, limiting profits of the company. During the said period the company has also opted for amortizing of foreign exchange fluctuations on the long term foreign currency monetary items over balance period. As of June 2015 the balance left to be amortized is Rs 403.77 crore. Due to increase in profit earning per share of the company rose up to Rs. 14.97 as against Rs. 12.99 per share as on June 2015, giving good benefit to the company’s shareholders.

The Positive news for the company came from other income category as company earned an income of Rs 4674 crore during first quarter as against Rs 3957 crore earned during same period last year, a growth of 18%. Profitability of this segment also rose in the current fiscal. Going forward it seems that company’s revenue from the interest income would also improve as off late as the interest rates are coming down.