Market Performance: REC Shares End Lower Despite Stable Q3 Numbers
The market took REC’s Q3 performance in its stride. Despite steady earnings and improving asset quality, the stock closed 0.6% lower at ₹375.20 on the BSE. The muted price action reflected a mix of stable fundamentals and cautious sentiment after a sequential dip in profits.
This reaction tells a familiar market story—when numbers meet expectations but don’t surprise, stocks often pause.
Main News: REC Q3 Results Show Earnings Stability, Sequential Softness
REC Q3 results delivered a picture of stability rather than acceleration.
For the third quarter of FY26, REC reported a standalone net profit of ₹4,043.08 crore.
This was nearly unchanged on a year-on-year basis compared to ₹4,029.09 crore in Q3FY25.
However, on a sequential basis, profit declined:
- Q2FY26 net profit: ₹4,425.86 crore
- Q3FY26 net profit: ₹4,043.08 crore
- Sequential decline: 8.6%
The quarter reflected steady operations but slightly softer performance compared to the preceding quarter.
Revenue Performance: Moderate Growth, Slight QoQ Dip
Revenue trends during the quarter followed a similar pattern—growth on an annual basis, modest decline sequentially.
Revenue from operations in Q3FY26: ₹14,910.88 crore
Compared with:
- Q3FY25: ₹14,157.19 crore (YoY growth of over 5%)
- Q2FY26: ₹15,084.13 crore (QoQ decline of ~1%)
The numbers indicate continued business traction, even as quarterly momentum moderated.
Expense Profile: Higher Costs Impact Sequential Profit
REC’s total expenses rose during the quarter, which played a role in the sequential softness in profits.
- Total expenses in Q3FY26: ₹9,836.10 crore
- Total expenses in Q3FY25: ₹9,063.04 crore
- Year-on-year increase: 8.5%
Higher costs, when viewed against relatively stable revenue, narrowed margins on a quarter-on-quarter basis.
Dividend Update: ₹4.60 Interim Dividend Declared
One clear positive from the REC Q3 results was the dividend announcement.
REC declared its third interim dividend for FY26 at 46%, translating to:
- ₹4.60 per equity share
- Face value: ₹10 per share
Key dividend dates:
- Record date: Friday, February 6, 2026
- Dividend payment date: On or before February 27, 2026
The dividend will be paid to:
- Shareholders holding shares in demat form, as per depository records on the record date
- Shareholders holding physical shares, whose names appear in the company’s register on the same date
Asset Quality: Sharp Improvement Across NPA Metrics
Asset quality stood out as one of the strongest highlights in REC Q3 results.
Key improvements included:
- Gross NPA ratio:
- December 2024: 1.95%
- Q3FY26: 0.88%
- Net NPA ratio:
- December 2024: 0.74%
- Q3FY26: 0.20%
- Provisioning coverage (Stage 3 assets):
- March 2025: 71.73%
- Q3FY26: 76.96%
The decline in non-performing assets and higher provisioning coverage underline stronger balance sheet quality during the quarter.
Capital Adequacy: Balance Sheet Comfort Remains Strong
REC’s capital position remained stable and well-supported.
- Capital to Risk-Weighted Assets Ratio (CRAR): 24.26%
This level of capital adequacy provides a cushion against risks and supports ongoing operations without balance sheet stress.
Company Snapshot: REC at a Glance
REC is a Maharatna PSU lender, primarily focused on financing India’s power sector. Its quarterly performance reflects steady lending activity, disciplined asset management, and a consistent dividend track record.
Summary: REC Q3 Results in One View
The REC Q3 results tell a story of stability rather than surprise.
- Net profit remained flat at ₹4,043 crore year-on-year
- Revenue saw over 5% annual growth
- Expenses increased, impacting sequential profitability
- Asset quality improved sharply, with lower NPAs
- ₹4.60 interim dividend reinforced shareholder payouts
- Capital adequacy stayed strong at 24.26%
While the stock ended slightly lower, the underlying numbers reflect a steady quarter marked by balance sheet improvement and consistent earnings delivery.
Source: Livemint
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