A pioneer in the area of rural electrification, this PSU has posted a consistent performance for year ended 31-03-08.
With a 27% rise in net income and 20% rise in operating expense, on the profitability front, the company has done well. Its consolidated net profit rose 30% at Rs.860.14 crore. On an equity of Rs.858.66 crores, it posted an EPS of Rs.10.94.
Its sanctions were up 85% and Rs.60,764 crore while disbursements rose 19% at Rs.16,303 crore. Infact, it disbursed a subsidy of Rs.3,350 crore and a loan of Rs.401 crore under Rajiv Gandhi Grameen Vidyutikaran Yojana.
On 05-05-08, REC was granted the ‘Navratna’ status. This gives its financial and administrative autonomy. REC can now take decisions of investing up to Rs.1,000 crore or 15% of its net worth independently. It would be able to expand its electricity business in the rural areas.
REC had gone public in March 2008, in the wake of the turmoil in the IPO markets cuased by Reliance Power. Yet, it had managed to do well and to a large extent, was responsible for restoring some faith back into the primary markets.
It had issued shares at Rs.105 and had got listed at Rs.128. It is currently quoted at Rs.111. Unlike PSU banks, REC does not disburse loans to farmers or individuals, it finances public sector projects and mega power projects. It is in no way affected by the debt waivers announced. It’s risk is to the extent of recovering money from other PSU’s, a risk which all banks face.
REC is a good buy at CMP of Rs.107.
With a 27% rise in net income and 20% rise in operating expense, on the profitability front, the company has done well. Its consolidated net profit rose 30% at Rs.860.14 crore. On an equity of Rs.858.66 crores, it posted an EPS of Rs.10.94.
Its sanctions were up 85% and Rs.60,764 crore while disbursements rose 19% at Rs.16,303 crore. Infact, it disbursed a subsidy of Rs.3,350 crore and a loan of Rs.401 crore under Rajiv Gandhi Grameen Vidyutikaran Yojana.
On 05-05-08, REC was granted the ‘Navratna’ status. This gives its financial and administrative autonomy. REC can now take decisions of investing up to Rs.1,000 crore or 15% of its net worth independently. It would be able to expand its electricity business in the rural areas.
REC had gone public in March 2008, in the wake of the turmoil in the IPO markets cuased by Reliance Power. Yet, it had managed to do well and to a large extent, was responsible for restoring some faith back into the primary markets.
It had issued shares at Rs.105 and had got listed at Rs.128. It is currently quoted at Rs.111. Unlike PSU banks, REC does not disburse loans to farmers or individuals, it finances public sector projects and mega power projects. It is in no way affected by the debt waivers announced. It’s risk is to the extent of recovering money from other PSU’s, a risk which all banks face.
REC is a good buy at CMP of Rs.107.
