REC Limited reported a consolidated net profit of ₹4,193 crore for the June quarter of FY27, a 6% decline compared to the same period last year. Despite the lower profit, the state-run lender maintained a steady Net Interest Margin of 3.34%. Investors are tracking the company’s ability to manage costs as it expands its focus on renewable energy and infrastructure loans.
Detailed Coverage
State-run non-banking financial company REC Limited released its financial results for the first quarter of the current fiscal year on Friday. The company reported a net profit of ₹4,193 crore for the three months ending June 30, 2026, which is 6% lower than the profit recorded in the same quarter last year. However, compared to the previous quarter, the profit shows a recovery of approximately 24%.
Income and Expense Trends
The company’s total income for the June quarter reached ₹14,200 crore. This is slightly higher than the ₹14,119 crore reported in the preceding quarter (Q4 FY26) but shows a minor decrease compared to the ₹14,591 crore earned in the year-ago period. Meanwhile, the company reported consolidated expenses of ₹14,469 crore. This marks a reduction from the costs incurred in the same period last year, reflecting the company’s focus on managing its operating expenses in a changing interest rate environment.
A key metric for lenders is the Net Interest Margin, which measures the difference between interest earned on loans and interest paid on borrowings. REC maintained this margin at 3.34% during the quarter. This steady performance is often a primary monitorable for investors, as it indicates how well the company manages its cost of funds and lending rates. With an annualised Earnings Per Share of ₹63.04, the company continues to maintain its position as a major lender within the power and infrastructure sectors.
Loan Book and Asset Quality
REC holds a significant position as one of the largest Central Public Sector Undertaking non-banking financial companies in India. The company has been actively shifting its lending focus toward renewable energy projects and broader infrastructure development. The stability of its financial performance remains tied to the execution of these long-term loans. Furthermore, the company has maintained healthy asset quality, with its Stage-3 loan ratio—a measure of bad loans—remaining near zero, which suggests that the company’s current loan portfolio is performing as expected.
For investors, the next steps to watch involve the growth trajectory of the renewable energy loan portfolio and whether the company can continue to protect its margins if the broader interest rate environment shifts. The cost of borrowing for state-run lenders often fluctuates with RBI policy and bond market conditions, making the company’s future quarterly reports critical for assessing long-term profit stability.