Whalesbook
📉 The Financial Deep Dive
REC Limited announced its Q3 FY26 financial results, highlighted by the declaration of a 46% interim dividend (₹4.60 per equity share) for FY2025-26.
The Numbers:
**Quarterly Performance (Q3 FY26 vs Q3 FY25):
- Standalone Net Profit (PAT):** Increased by a marginal 0.3% YoY to ₹4,043.08 Cr from ₹4,029.09 Cr.
- Consolidated Net Profit (PAT):** Declined by 0.6% YoY to ₹4,052.44 Cr from ₹4,076.35 Cr, despite a 5.2% rise in consolidated income to ₹15,017.70 Cr.
- Standalone Total Income:** Grew 5.3% YoY to ₹14,910.88 Cr.
- Basic & Diluted EPS:** Standalone stood at ₹15.35 (vs ₹15.30 YoY), while Consolidated was ₹15.39 (vs ₹15.48 YoY).
**Nine Months Performance (9M FY26 vs 9M FY25):
- Standalone Net Profit (PAT):** Saw robust growth of 12.6% YoY to ₹12,919.96 Cr.
- Consolidated Net Profit (PAT):** Increased by 11.7% YoY to ₹12,933.08 Cr.
- Standalone Total Income:** Increased 9.5% YoY to ₹44,641.43 Cr.
- Basic & Diluted EPS:** Standalone stood at ₹49.07 (vs ₹43.59 YoY), while Consolidated was ₹49.12 (vs ₹43.95 YoY).
The Quality:
- Margins: Standalone Operating Margin for Q3 FY26 was 34.03% (vs 35.98% YoY), and Net Profit Margin was 27.04% (vs 28.43% YoY). For the 9M period, Operating Margin improved to 36.24% (vs 35.39% YoY) and Net Profit Margin to 28.85% (vs 28.13% YoY).
- Loan Assets: Standalone loan assets grew by 2.6% to ₹5,81,787.01 Cr from ₹5,66,883.29 Cr as of March 31, 2025.
- Provisioning: While Stage 3 provisioning coverage ratio increased to 76.96% (from 71.73% YoY), the overall provisioning coverage ratio declined to 1.60% from 1.90% YoY. This decrease in overall coverage warrants attention.
- Asset Quality: The Gross Credit Impaired Assets Ratio improved significantly to 0.88% (from 1.95% YoY), and Net Credit Impaired Assets Ratio improved to 0.20% (from 0.74% YoY), indicating better control over credit risk.
- Capital Adequacy: CRAR stood at 24.26% as of December 31, 2025, down from 25.33% a year ago.
- Leverage: The Debt Equity Ratio improved to 5.78 (standalone) and 5.73 (consolidated), down from 6.38 and 6.33 respectively YoY.
The Grill:
The provided text does not contain specific management guidance or commentary on outlook. The results primarily focus on financial performance and dividend declaration. However, the year-on-year dip in consolidated PAT for Q3, alongside a reduction in overall provisioning coverage, could be points of scrutiny for analysts.
Risks & Outlook:
No specific management guidance was provided for future performance. Investors will need to monitor the trend in consolidated profitability and the implications of the reduced overall provisioning coverage ratio. The strong nine-month performance and continued improvement in asset quality provide a positive backdrop.