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Rural Electrification Corp
Rural Electrification Corp (REC) generally sounded very positive on its growth plans and
targets. It has a disbursement target of INR240bn for FY11 which it feels is achievable as
it has already disbursed INR160bn for 9MFY11. For FY12, it plans to disburse INR270bn
and expects the loan book to grow 28-29% YoY.
The company does not believe a lack of coal linkages could derail the power projects. In
fact, REC is confident that the projects it has sanctioned are running well in time.
The company reiterated that it is indeed conscious of credit quality. REC has adopted a
strategy of funding nearly the whole project rather than small pieces; this has helped it
acquire long-term relationships and maintain operational efficiency.
REC is confident of maintaining zero NPA levels due to its stringent policies and the fact
that it now rarely funds a project until an escrow cover is created.
It expects to maintain an equal mix of generation and T&D projects going ahead. REC
also expects its private sector loan book to reach ~15% of its total portfolio in FY12,
from the current ~7%. It expects margins to remain above 3.5%.
Growth and margin expectations given by the company are consistent with the earlier
guidance.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Rural Electrification Corp
Rural Electrification Corp (REC) generally sounded very positive on its growth plans and
targets. It has a disbursement target of INR240bn for FY11 which it feels is achievable as
it has already disbursed INR160bn for 9MFY11. For FY12, it plans to disburse INR270bn
and expects the loan book to grow 28-29% YoY.
The company does not believe a lack of coal linkages could derail the power projects. In
fact, REC is confident that the projects it has sanctioned are running well in time.
The company reiterated that it is indeed conscious of credit quality. REC has adopted a
strategy of funding nearly the whole project rather than small pieces; this has helped it
acquire long-term relationships and maintain operational efficiency.
REC is confident of maintaining zero NPA levels due to its stringent policies and the fact
that it now rarely funds a project until an escrow cover is created.
It expects to maintain an equal mix of generation and T&D projects going ahead. REC
also expects its private sector loan book to reach ~15% of its total portfolio in FY12,
from the current ~7%. It expects margins to remain above 3.5%.
Growth and margin expectations given by the company are consistent with the earlier
guidance.
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