PSU Power stock in focus after ₹1 Lakh Cr MOU with MMRDA in for infra projects in Mumbai Metropolitan Region

This Maharatna Power stock engaged in financing infrastructure and power projects, focusing on energy, urban development, and renewable energy sectors, is in focus after signing a Rs 1 lakh crore MOU with Mumbai Metropolitan Region Development Authority (MMRDA) for infrastructure development in Mumbai Metropolitan Region (MMR).

Stock Price Movement

With a market capitalization of Rs. 1,01,800.44 crore, the shares of REC Limited were currently trading at Rs. 386.60 per equity share, rising nearly 3.94 percent from its previous day’s close price of Rs. 395.85. 

What Happened

REC Limited has signed an MoU with the Mumbai Metropolitan Region Development Authority (MMRDA) to provide financial support of Rs. 1 lakh crore for infrastructure projects in the Mumbai Metropolitan Region (MMR). 

The agreement focuses on projects related to urban mobility, housing, and essential infrastructure. The funding is to be disbursed over five years and aims to support the modernization and enhancement of the region’s infrastructure, ensuring sustained progress in key sectors.

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Future Outlook

REC Limited’s management is optimistic about continued growth in loan disbursements and maintaining strong asset quality. The company aims to increase its private sector exposure to 30 percent by 2030, focusing mainly on renewable energy projects. 

With the Revamped Distribution Sector Scheme (RDSS) projects gaining momentum, REC expects growth in disbursements. The management also anticipates keeping its Net Interest Margins (NIMs) above 3.65 percent to 3.7 percent in the coming years.

Operational Highlights

In the first nine months, REC sanctioned projects worth Rs. 2,71,814 crores, including Rs. 79,135 crores for renewable energy. As of December 31, 2024, the outstanding loan book reached Rs. 5,65,621 crores, showing a 14 percent increase from the previous year. The company maintains strong asset quality, with a provision coverage ratio of 61.88 percent.

Recent Quarter Result

REC Limited’s revenue from operations has increased by 18.42 percent from Rs. 12,052 crore in Q3 FY24 to Rs. 14,272 crore in Q3 FY25. The company’s net profit has increased by 23.22 percent, from Rs. 3,308 crore in Q3 FY24 to Rs. 4,076 crore in Q3 FY25.

Written By – Nikhil Naik

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