Rec Ltd – Q3FY26

• Net interest income (NII), below estimates by 6.5%, rising by 2.9% y-o-y and falling by 4.1% q-o-q to Rs. 4,996 crore. NIM dropped by 15 bps to 3.43% (of AUM), also below estimates by 17 bps due to rise in borrowing costs. PPOP, slightly below estimates, up by 4.1% y-o-y and down by 8.1% to Rs. 5,228 was reflection of NII along with higher Opex.
• Credit cost came in at 0.08% of AUM to Rs. 111 crore, up by 14 bps y-o-y and fell by 2 bps q-o-q. It also missed our estimates.
• PAT below estimates by 5.6% to Rs. 4,043 crore, down by 8.6% q-o-q due to fell in disbursement growth, margin contraction and higher credit costs.    
• Asset quality saw continued improvement, with GNPA reduced by 107 bps y-o-y and 18 bps q-o-q to 0.88%. NNPA reduced by 54 bps y-o-y and 4 bps q-o-q to 0.20%. AUM up by 2.9% to Rs. 5,82,000 crore, however it was flat on sequential basis. Disbursement fell by 8.6% y-o-y and 10.7% q-o-q to Rs. 49,988 crore due to higher prepayments / balance transfers. The company delivered below estimate performance in Q3FY26 except improvement in asset quality. Though, We have positive view on stock and come out with detail report soon.    

Results Table

Actual Vs. Estimated

Key Metrics

Asset Quality