The company has recommended a final dividend of Rs 1.75 per share for FY18
Rural Electrification Corporation (REC) on Monday reported a 37 percent decrease YOY in its March quarter net profit at Rs 834.79 crore, missing estimates due to an increase in provisions for bad loans.
A Reuters poll of equity analysts had estimated profits to fall marginally to Rs 1224.3 crore in the fourth quarter of FY18.
The company had posted profit of Rs 1319.2 crore in the fourth quarter of last fiscal.
Interest income saw a 5 percent drop YoY in Q4 to Rs 5,444.59 crore. Other income dropped to Rs 33.03 crore in Q4 from Rs 131.70 crore in the year ago period.
The Reserve Bank of India’s revised bad loan resolution framework on February 12. REC said that while these norms were not applicable to them, they have followed it.
Consequently, they classified loans amounting to Rs 9591.39 crore as non-performing assets (NPA) as on March 31, 2018. Due to this, the company said that provisions and contingencies are higher and profit before tax is lower by Rs 359.24 crore. REC had made a provision of Rs 959.14 crore against these loans.
The company has recommended a final dividend of Rs 1.75 per share for FY18 subject to shareholder approval.