REC Q1 profit falls 6% as cheaper loans reduce interest income; declares ₹4.25 interim dividend
Author: CNBC-TV18 Markets·
Key Takeaways
- •REC's profit declined 6% in the June quarter because lower lending rates reduced interest income.
- •The company declared an interim dividend of ₹4.25 per share.
- •Improving credit quality in the power sector helped reduce bad loans to near-zero levels.
- •Interest income remains a key driver of profitability for lenders such as REC.
REC reported a 6% decline in profit for the June quarter as lower lending rates weighed on interest income.
The state-owned power sector lender said it declared an interim dividend of ₹4.25 per share, a move that comes even as the quarter reflected pressure on earnings from cheaper loans. For lenders such as REC, interest income is a key driver of profitability, so changes in lending rates can quickly flow through to the bottom line.
REC also said improving credit quality in the power sector helped reduce bad loans to near-zero levels, underscoring that asset quality remains a closely watched part of the company’s business as it extends financing to the sector.