REC Ltd Q2 FY26 | PAT ₹ 4,415 Cr | Loan Book ₹ 5.16 Lakh Cr | Dividend ₹ 4.60 — India’s Power Banker Prints Cash Faster Than It Lends It
1️ At a Glance
Some PSUs burn money; REC Ltd burns midnight oil and still mints profits. At ₹ 375 per share with a market cap of ₹ 98,733 crore, this Maharatna-in-waiting lender has turned the Ministry of Power’s to-do list into a balance-sheet bonanza. Q2 FY26 revenue stood at ₹ 15,153 crore (+10.8 % YoY) and PAT ₹ 4,415 crore (+9.3 % YoY). Operating margins? A baffling 97 %. Interest coverage? Barely 1.6× — because it borrows cheap from Delhi and lends dear to Delhi.
Highlights: ROE 21.5 %, P/E 5.7×, Dividend Yield 4.8 %, Debt ₹ 5.16 lakh crore. Basically a sovereign-guaranteed money printer that occasionally sends you ₹ 4.60 as thank-you note.
2️ Introduction — The PSU That Banks on Voltage
Once upon a load-shedding, the Government of India decided to create a financier so no project ever dies for lack of loans. Thus was born REC — the “Reserve Electricity Corporation,” a PSU that grew up to be Rural Electrification Corporation Limited, and then just REC because who wants to sound rural after ₹ 5 lakh crore assets?
Today it is the Power Ministry’s wallet. From coal plants to solar parks, from transmission lines to metro rails, REC writes the cheques that keep India’s grid glowing. Where private NBFCs fear political default, REC finds sovereign comfort: 90 % of its book belongs to State entities who may delay payment but never vanish.
You don’t call their borrowers “clients.” You call them “Chief Ministers.” And yet, despite the bureaucratic drama, REC has posted 13 % CAGR sales and 26 % CAGR profit over five years — numbers private NBFCs would sacrifice their compliance teams for.
3️ Business Model — WTF Do They Even Do?
Short answer: they finance anything that runs on electricity or ego.
Four major circuits:
Generation Loans – coal, hydro, gas, solar, wind.
Transmission Loans – evacuation of power and strengthening of grids.
Distribution Loans – transformers and cables that actually work.
Infra & Logistics Loans – metros, roads, ports, and occasionally political ambitions.
FY23 sanctions (₹ 2.68 lakh crore): • Power Gen ₹ 34,529 cr • Renewables ₹ 21,371 cr • T&D ₹ 1.22 lakh cr • Infra & Logistics ₹ 85,734 cr
FY24 targets: ₹ 4 lakh cr sanctions, ₹ 1.5 lakh cr disbursements. When states delay payment, REC doesn’t panic — it simply writes to the Power Secretary. Try doing that if you’re a private NBFC.
4️ Financials Overview
Source table
Metric
Q2 FY26
Q2 FY25
Q1 FY26
YoY %
QoQ %
Revenue
15,153
13,682
14,737
10.8
2.8
EBITDA
14,677
13,585
14,521
8.0
1.1
PAT
4,415
4,038
4,466
9.3
-1.1
EPS (₹)
16.8
15.3
17.0
9.8
-1.2
Commentary: Profit flat, margins massive, P/E tiny. The perfect PSU triangle. Annualised EPS ≈ ₹ 67 → P/E ≈ 5.6×. A banker to power projects priced like a sugar mill.
