Rural Electrification Q3 profit seen up 24% to Rs 955 cr

State-controlled Rural Electrification Corporation (REC) is set declare its results for the third quarter of financial year 2012-13 on Monday. Analysts on an average expect profit after tax of the company to grow by 24 percent year-on-year to Rs 955 crore in the quarter.

Net interest income (NII) is seen going up by 32 percent to Rs 1,352 crore from Rs 1,019 crore during the same period.

Analysts expect the same NII trajectory like previous quarter. But PAT could be tempered due to higher provisions.

In July-September quarter, NII rose by 35 percent YoY to Rs 1,280 crore and profit after tax went up by 54 percent YoY to Rs 954 crore.

Analysts feel the loan growth is likely to remain healthy at more than 20 percent in October-December quarter.

Over the past two quarters, REC's margins have expanded by more than 50 basis points, led by improvement in yields and its tight leash on cost of funds. However, in the current quarter, margins are either expected to moderate or stabilise at 4.5 percent quarter-on-quarter.

Asset quality has remained healthy, but will remain a key monitorable, given the uncertain macro environment. Analysts have factored in higher provisions.

While Power Finance Corporation has announced that it will make standard asset provisions from the second half of FY13; REC strategy on the same should be watched out for.

On Friday, shares fell 2.05 percent to close at Rs 236.85 on Bombay Stock Exchange.