Expect growth rate of 15-20%, NIMs sustainable at 5%: REC

After posting a record high net interest margin (NIMs) at Rs 1430 crore in the Decemeber quarter, Rural Electrification Corporation (REC) is confident of sustaining it going ahead. Rajeev Sharma, CMD of the state-owned company is expecting that NIMs will continue to growing at the rate of more than 30 percent.

Sharma is also hopeful of a growth rate of 15-20 percent even though the yields have come down because of low interest rates. Talking about the company's road ahead, he said in an interview to CNBC-TV8," Yields have come down because interest rates are coming down in the market, but our growth rate will definitely be between 15-20 percent."
REC posted a net profit at Rs 1,027 crore against Rs 770 crore year on year for the third quarter of financial year 2012-13. Below is a verbatim script of Rajeev Sharma's interview on CNBC-TV18

Q: Your NIMs are at a record high of 5 percent. Do you think they are sustainable?
A: They are very much sustainable, because we are growing at the rate of more than 30 percent. Our NIMs this quarter was 5.01 percent. Q: Going forward, what kind of loan growth do you see for the remaining 2013?
A: 15-20 percent, definitely. Q: How would this tie-in in terms of what you foresee for yields through the course of this year?
A: Yields have come down because interest rates are coming down in the market, but our growth rate will definitely be between 15-20 percent. Q: You had no fresh non-performing loans (NPLs) which is the big positive in your numbers. Is that something you are confident about and do not expect to see more pressure on the NPL side over the next few quarters?
A: Yes, my net non-performing asset (NPA) is 0.3 percent. Two projects which were NPA last year, continue to be so. One is Maheshwar and the other one is a gas-based project. One hydro project because of resettlement and rehabilitation (R&R) issues and one Konaseema gas-based project in Andhra Pradesh, because they are getting inadequate quantities of gas, the project is under operation but is being operated at low plant load factor (PLF).