REC Q2 Results: Profit Falls 21% to ₹3,478 Crore (Oct 26, 2026)

Lending to the power sector is still growing at a decent clip, but REC’s bottom line went the other way this quarter. The REC Q2 results, approved by the board on October 26, 2026, show consolidated net profit of ₹3,477.73 crore for July-September, down 21.2% from ₹4,414.93 crore a year ago. That comes straight from the results and press release REC filed with NSE and BSE.

REC Q2 results: the headline numbers

• Consolidated net profit: ₹3,477.73 crore, down 21.2% year-on-year and 17.1% lower than ₹4,192.76 crore in the June quarter.
• Standalone net profit: ₹3,391.18 crore against ₹4,425.86 crore a year ago, a fall of 23.4%.
• Consolidated revenue from operations: ₹15,000.40 crore, about 1% below ₹15,152.67 crore last year.
• Finance costs: ₹9,522.05 crore, up 4.3% from ₹9,130.68 crore.

CNBC-TV18 put net interest income at ₹5,478 crore, down 9% from ₹6,022 crore. That matches consolidated revenue from operations minus finance costs in the filing.

Where the profit went

Revenue barely moved, so the damage sits on the cost side, mainly in three lines. Finance costs climbed by roughly ₹391 crore. Impairment on financial instruments was a charge of ₹352 crore, against a write-back of ₹966.58 crore in the June quarter, which flattered Q1 and makes the sequential drop look sharper. And fee and commission income shrank to ₹59.72 crore from ₹473.75 crore a year ago.

CSR spending of ₹186.32 crore, against ₹5.73 crore in Q1, added to the drag. Profit before tax ended at ₹4,391.14 crore, down 20.9% from ₹5,548.94 crore.

The balance sheet story is better

REC’s press release leans on growth, and the numbers there are solid. The loan book rose 5% sequentially to about ₹6.17 lakh crore as of September 30, with assets under management up ₹26,537 crore in the quarter. Disbursements in the power sector were ₹53,541 crore in Q2 and ₹79,207 crore for the first half.

• The renewable energy book grew 27% year-on-year to about ₹86,660 crore.
• Loans to non-power infrastructure and logistics reached about ₹61,637 crore, more than 10% of total loan assets.
• Net NPA was 0.11%, and Stage II loan assets fell 80% from a year ago to about ₹3,235 crore.
• Net worth rose 14% year-on-year to about ₹94,325 crore. CRAR stood at 24.04% and CET-1 at 20.91%.
• Net interest margin for the first half was 3.22%.

A 5% jump in the loan book in one quarter, alongside a 21% fall in profit, tells you the pressure is on margins and costs, not on demand for loans.

Dividend, stock move and the PFC merger

The board declared a second interim dividend of ₹3.50 per share of face value ₹10 for FY27. The record date is Friday, October 30, 2026, and payment will be made on or before November 21, 2026.

According to CNBC-TV18, REC shares ended 1.5% higher at ₹298.20 on the NSE on results day. The stock was still down 4.7% over the past month and 18.9% so far this year.

The bigger overhang is the planned merger of REC into Power Finance Corporation. REC informed the exchanges of the RBI’s no-objection certificate on October 15 and of the NSE and BSE observation letters on October 19. CNBC-TV18, citing Moneycontrol, reported that the merger is targeted to take effect from April 1, 2027, and still needs statutory, regulatory, shareholder and creditor approvals.

What it means for investors

Growth and asset quality look healthy on the company’s own numbers, but higher borrowing costs, a provisioning charge and a collapse in fee income pulled earnings down hard. REC has scheduled an investor call for October 29, and margins and fee income are the obvious questions. For a framework on reading results line by line, see our guide on how to analyse quarterly results For the rest of the week, check our Q2 results calendar, and compare another state-run lender’s numbers in Bank of Maharashtra’s Q2 results.

Disclaimer: This article is for information and education only and is not investment advice. Please do your own research or consult a SEBI-registered adviser before making any investment decision.