REC Ltd Reports Record ₹16,282 Cr FY26 Profit; Board Recommends ₹18.55 Dividend

REC Limited reported its highest ever annual standalone profit, reaching ₹16,282 crore for the financial year ended March 31, 2026. The company's loan book hit an all-time high of ₹5.84 lakh crore.

Financial Highlights

REC Limited announced its financial results for the fiscal year 2025-26, marking a significant milestone. The company posted its highest ever annual standalone net profit of ₹16,282.26 crore. This performance was supported by a 21% increase in sanctions to ₹4,09,097 crore and a 10% rise in disbursements to ₹2,11,189 crore.

The Board of Directors recommended a final dividend of ₹1.55 per equity share. Together with the interim dividend, the total payout for FY2025-26 is ₹18.55 per share. REC's loan book reached an all-time high of ₹5.84 lakh crore, while its net worth grew 9% to ₹84,290 crore. The Capital Adequacy Ratio (CRAR) was 23.11%.

Key Impact

REC's strong performance highlights its key role in funding India's power and infrastructure development. The record profit and dividend payout signal financial health and operational efficiency. Its focus on asset quality, shown by near-zero Net Stage-3 loans (0.12%) and a reduction in Stage-2 loans, builds confidence in its loan portfolio.

The company's strategy of adjusting loan yields to reflect lower risk premiums maintains profitability. This positions REC as a key contributor to economic growth and energy security.

Company Background

REC, a large public sector undertaking under the Ministry of Power, is a leading financial institution financing and promoting power and infrastructure projects across India. It has played a key role in national rural electrification programs like Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Saubhagya. Consistent government support and strategic alignment have driven steady growth in its loan book and disbursements, fueled by increasing demand for energy and infrastructure.

Investor Takeaways

Shareholders will receive a total dividend of ₹18.55 per share for FY2025-26, reflecting the company's strong profitability.

REC's stronger balance sheet, with an all-time high loan book and net worth, enhances its capacity for future lending and project financing.

The focus on high asset quality with reduced NPAs and Stage-2 loans improves the company's risk profile.

The adjusted loan yield strategy signals a focus on sustainable profitability and competitive positioning.

Risks to Watch

REC's filing highlights strong asset quality metrics, with Net Stage-3 loans at 0.12%. The company has also reduced its Stage-2 loans. No immediate risks related to regulatory actions or governance issues were highlighted. However, the broader economic environment and interest rate fluctuations remain inherent risks for any financial institution.

Peer Comparison

REC's closest peer, Power Finance Corporation (PFC), also reported strong results. For FY2025-26, PFC posted a profit after tax of ₹11,979 crore and recommended a final dividend of ₹3.50 per share. As government-owned non-banking financial companies (NBFCs), both entities play key roles in India's power and infrastructure financing, showing strong performance amid growing demand.

Performance Metrics

• REC's net profit grew from ₹12,732.72 crore in FY2024-25 to ₹16,282.26 crore in FY2025-26.
• REC's total sanctions increased by 21% year-on-year to ₹4,09,097 crore in FY2025-26.
• REC's disbursements rose by 10% year-on-year to ₹2,11,189 crore in FY2025-26.

What to Track Next

• Shareholder approval for the final dividend recommendation at the upcoming Annual General Meeting (AGM).
• The expected date for the final dividend payment, within 30 days of declaration at the AGM.
• REC's continued progress in asset quality maintenance and loan book growth management amidst evolving market dynamics.
• Future announcements on new financing schemes or partnerships that could boost operational expansion.