REC Q2 Net Profit Falls 21% as Net Interest Income Declines 9%
Indian power-sector lender REC reported a 21.2% annual drop in net profit for the quarter to September 2026, while its loan book grew to Rs 6.17 lakh crore.
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what happened
REC, the state-owned power-sector financier formerly known as Rural Electrification Corporation, reported consolidated net profit of Rs 3,477.73 crore for the quarter ended 30 September 2026, down 21.2% from Rs 4,414.93 crore a year earlier, according to Moody's. Revenue from operations fell 1% to Rs 15,000.40 crore, and net interest income dropped 9% to Rs 5,478 crore.
The loan book rose 5% quarter on quarter to Rs 6.17 lakh crore, while total expenses climbed 10.46% year on year, adding pressure on earnings. The board also declared a second interim dividend of Rs 3.50 per share for FY27.
The proposed merger with Power Finance Corporation is moving ahead. The Reserve Bank of India issued a no-objection certificate on 15 October, subject to conditions, and the deal still depends on the requisite approvals.
why it matters
Lending growth alongside lower profit points to margin pressure, as interest income is falling faster than the asset base is expanding. Investors in India's financial sector will watch cost trends and progress on the PFC merger.
market impact
Indian financials: weaker profit and higher costs weigh on REC shares; PFC merger progress is the key catalyst
tags
instruments
sources
- REC Q2 Profit Drops 21%; Net Interest Income Declines 9% — Moody's, 26 October 2026 at 23:04 UTC
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