REC Ltd Q1 FY27 Results (NSE: RECLTD)
Signal: Earnings declined
The read
First YoY revenue decline in recent quarters; large impairment write-back (₹956 Cr credit) prevented a sharper PAT fall, but volatile translation losses (₹911 Cr vs ₹51 Cr) drove cost-to-income up 414bps. Revenue trajectory has reversed after four quarters of growth, and PAT has declined YoY for three consecutive quarters. The merger with PFC remains the key catalyst.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹14,434.92 Cr | -2.1% | -75.8% |
| EBIT | ₹14,015.8 Cr | -4.0% | |
| Net profit | ₹4,192.76 Cr | -6.1% | |
| EPS | ₹15.92 | -6.1% | |
| EBIT margin | 0% |
P&L walk
Revenue declined YoY for the first time; impairment write-back cushioned PAT but volatile translation losses pressured margins.
Key positives
- Impairment write-back of ₹956.58 Cr (credit) reflects improving credit quality; Stage 3 provisioning coverage at 51.17%.
- Gross loan assets grew 1.4% QoQ to ₹5.90 lakh Cr; net interest income improved 5.1% QoQ as finance cost declined.
- Interim dividend of ₹4.25 per share declared; low GNPA of ~0.23% indicates strong asset quality.
Key concerns
- Revenue declined 2.1% YoY — first YoY drop in the current series — on lower interest income from loan assets.
- Net translation loss surged to ₹911 Cr from ₹51 Cr YoY, inflating cost-to-income by 414bps.
- PAT declined YoY for third consecutive quarter (Q3FY26: -0.6%, Q4FY26: -21.7%, Q1FY27: -6.1%), signaling persistent earnings pressure.
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