REC Ltd Posts 29% Q1 Profit Surge, Declares Interim Dividend
REC Ltd, a key player in India’s power finance sector, reported a remarkable 29% jump in net profit for the first quarter of the financial year 2025-26 (Q1 FY26). This significant boost underscores the company’s stable growth trajectory and resilient business model in a changing stock market landscape.
The results not only beat market expectations but also came with a pleasant surprise, an interim dividend for investors.
Strong Financial Performance in Q1 FY26
In its Q1 FY26 earnings, REC Ltd reported a net profit of ₹4465 crore, compared to ₹3460 crore in the same quarter last year. This 29% surge reflects the company’s robust asset quality and increased disbursements.
The company’s loan book expanded significantly to ₹5.85 lakh crore, compared to ₹4.74 lakh crore in the previous year. This shows healthy demand for credit in the power infrastructure sector and REC’s strong positioning to meet it.
Declares ₹4.60 Interim Dividend Per Share
Investors were thrilled as REC Ltd also declared an interim dividend of ₹4.60 per share. The record date for the dividend is August 1, 2025, with payment expected soon after. This marks another year where the company is rewarding its shareholders with stable returns, consistent with its performance in past fiscal years.
This move not only strengthens investor confidence but also places REC Ltd among dividend-yielding favorites in India’s stock market.
Asset Quality Remains Strong Amid Credit Growth
One of the most critical highlights of the quarter is the improvement in asset quality. The company’s Gross Non-Performing Asset (GNPA) ratio improved to 1.07%, while Net NPA dropped to just 0.29%.
Such performance is rare in the NBFC space, especially for a company of this scale. With prudent risk management and a focus on high-quality borrowers, REC Ltd continues to lead in financial discipline and operational efficiency.
Continued Focus on Infrastructure and Green Energy
REC Ltd has remained aligned with the Government of India’s focus on infrastructure development, particularly in the renewable and green energy sector. A significant portion of its loan sanctions in the quarter supported solar, wind, and hydro power projects.
By funding future-ready projects and digitized grid infrastructure, REC is not only driving revenue growth but also building long-term sustainability, a value increasingly recognized by AI stocks investors and ESG-focused funds.
Market Sentiment and Stock Performance
REC Ltd’s Q1 results were met with positive sentiment in the stock market. Shares of the company saw increased volumes and upward momentum following the earnings release. Analysts tracking the stock predict further upside potential, especially given the steady dividend payouts and loan book expansion.
As per stock research, REC’s price-to-earnings (P/E) ratio remains attractive relative to peers, making it a value buy in the financial services segment.
Outlook for FY26: Growth-Driven Strategy
REC Ltd has made its strategic intent clear: sustainable growth, risk moderation, and capital efficiency. The management highlighted plans to focus more on renewable energy, transmission infrastructure, and modernization of the national grid.
Disbursements are expected to continue rising in the coming quarters, as the power and infrastructure sectors demand more liquidity and financing. With improved margins and strong government support, REC is positioned for a solid FY26.
Why REC Ltd Stands Out in the NBFC Space
In the crowded space of non-banking financial companies, REC Ltd’s performance is a standout due to:
- Consistent profitability and dividend payouts
- Improving asset quality even in uncertain markets
- A growing and diversified loan book
- Government backing and alignment with national infrastructure goals
- Commitment to green financing and energy security
This positions REC Ltd not only as a defensive stock but also as a potential AI stock play, thanks to its data-driven credit strategies and smart analytics deployment in project evaluation.
Stock Research Recommendations
Stock analysts maintain a “Buy” or “Accumulate” rating on REC Ltd, with target prices ranging from ₹570 to ₹630, depending on future loan growth and NPA management. Given the current dividend yield and capital appreciation potential, it remains an attractive proposition for long-term investors.
For investors seeking high-quality exposure in the NBFC space, especially with ESG credentials and strong government linkages, REC Ltd offers a compelling case.
FAQs
Yes, given its strong Q1 FY26 earnings, consistent dividend history, and solid asset quality, REC Ltd is considered a strong pick for both value and income investors.
REC Ltd has declared an interim dividend of ₹4.60 per share. The record date is August 1, 2025, and the dividend will be paid shortly thereafter.
REC Ltd has improved its GNPA to 1.0% and NNPA to 0.29%, mainly through better recovery, strong project selection, and tight risk controls.
Disclaimer:
This content is made for learning only. It is not meant to give financial advice. Always check the facts yourself. Financial decisions need detailed research.