Mumbai, Nov 1 (PTI) Power industry-focused lender REC on Wednesday reported a 39 per cent jump in its September quarter net profit at Rs 3,790 crore on a consolidated basis compared to the year-ago period.

At a standalone level, the net profit grew 38.25 per cent to Rs 3,773 crore. The state-run company's core income growth was subdued, but provision write-back from bad assets where it managed a resolution and a change in provisioning policies helped it post high-profit growth.

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There was a write-back of Rs 760 crore under the impairment on financial instruments aspect as per the disclosures made, while company executives explained that there was a Rs 900 crore benefit on account of resolutions and Rs 500 crore benefit on the change in provisions.

The company used to set aside 0.40 per cent on every asset since the onset of the pandemic, which has now been discontinued to make it into a 0.40 per cent provision on the overall standard asset book giving it a Rs 500 crore benefit for the quarter, an executive explained.

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Its core net interest income grew to Rs 3,856 crore in the reporting quarter as against Rs 3,804 crore in the year-ago period.

The total income grew 17 per cent to Rs 11,590 crore, while the overall assets under management grew 20 per cent in the first half of the fiscal.

Its gross non-performing assets ratio came down to 3.14 per cent at the end of September, from 4.03 per cent in the year-ago period and 3.28 per cent in the quarter-ago period.

Its chairman and managing director V K Dewangan told reporters that there was no fresh slippage between July-September, making it the seventh quarter in a row of no fresh additions.

The net NPA declined to 0.96 per cent, and the company is targeting to get the same to zero by the end of FY25 by resolving the nine remaining sour assets, he said.

When asked if the financier is risk-averse, a company official replied in the negative and pointed to its bets in emerging technologies like green hydrogen.

The share of private sector borrowers in the overall book stands at over 10 per cent, and the company is aiming to increase the same to 30 per cent by FY30. An official said Adani Group companies account for about Rs 8,000 crore of the overall Rs 45,135 crore in loans outstanding to the private sector.

Dewangan said the private sector exposure will grow on the back of bets on the renewable sector, ports and airports.

The overall share of non-power bets in the logistics and infrastructure sectors now stands at 20 per cent, which it aims to take to 30 per cent eventually.

On the funding side, it is aiming to borrow up to USD 500 million equivalent through a global Japanese Yen green infrastructure bond issue which is likely to be completed by November. An official explained that such borrowings are coming at 6 per cent after accounting for the cost of hedging, which is better than in the US where the rates have hardened.

It is aiming to finance 10,000 electric buses in FY24, and take the number to 50,000 by the end of FY25, an official said, adding that the lending is across states and OEMs.

REC is also studying a proposal to take “large exposure” in the ambitious Wadhwan Port project promoted by India's largest container port JNPA near Mumbai, Dewangan said.

The REC scrip closed 1.63 per cent down at Rs 282.85 apiece on the BSE on Wednesday, as against a 0.44 per cent correction on the benchmark.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)