REC Q1 PAT seen up 18% at Rs 1064 cr: Motilal Oswal
Motilal Oswal expects Rural Electrification Corporation (REC) to report a 10.5 percent growth quarter-on-quarter (rise of 17.7 percent year-on-year) in net profit at Rs 1064.2 crore.
August 07, 2013 / 18:33 IST
Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the NBFC sector. The brokerage house expects Rural Electrification Corporation (REC) to report a 10.5 percent growth quarter-on-quarter (rise of 17.7 percent year-on-year) in net profit at Rs 1064.2 crore.
Net interest income is expected to increase by 4.5 percent Q-o-Q (up 26.3 percent Y-o-Y) to Rs 1472 crore, according to Motilal Oswal.Motilal Oswal report on Rural Electrification CorporationWe expect loan growth to remain healthy at 20 percent+. We model in loan growth of 23.5 percent Y-o-Y and 3.5 percent Q-o-Q.RECL's margins had expanded by over 30bp in 4QFY13 led by improvement in yields and tight leash on cost of funds. However, in 1QFY14, we expect margins to moderate to 4.5 percent.Due to sharp depreciation in currency during the quarter we are factoring in MTM loss of INR 300 million for 1QFY14 v/s INR 41 million in 4QFY13.Barring a couple of accounts, asset quality has remained healthy. It will remain a key monitorable, given the uncertain macro environment.
We model in provisions of INR 410 million during the quarter.We expect PAT to grow 26 percent Y-o-Y and 4.3 percent Q-o-Q.The stock trades at 0.9x FY14E and 0.8x FY15E BV. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
