"REC Q2: ₹4,415 Cr Profit, Dividend Declared – But Why Did Margins Shrink?"

📊 Q2 FY26 Highlights - Net Profit: ₹4,415 crore, up 9.3% YoY - Revenue: ₹15,152.67 crore, up 10.7% YoY - EBITDA: ₹14,677 crore, up 8% YoY - Net Interest Income (NII): ₹6,022 crore, down 16.3% YoY - EBITDA Margin: 96.9%, down from 99.3% YoY 💰 Dividend Update - Interim Dividend: ₹4.60/share (face value ₹10) - Record Date: October 27, 2025 - Total Interim Dividend FY26 (so far): ₹9.20/share 📉 Stock Impact - Current Price: ₹374.95 (↓ ₹2.55 / -0.69%) - The stock saw mild selling pressure post-results due to NII decline and margin compression. - Dividend declaration cushioned downside, but future upside depends on loan book growth and interest rate cycle. 🔍 Investor Watchouts - NII Decline: Indicates pressure on lending spreads or rising cost of funds - Margin Compression: EBITDA margin fell ~240 bps YoY - Debt Cycle Sensitivity: As a PSU lender, REC is exposed to infra project delays and refinancing risks 🚀 Future Growth Drivers - Loan Book Expansion: Crossed ₹5.82 lakh crore; disbursements up 27%, sanctions up 97% YoY - Power Sector Push: REC benefits from government’s infra and renewable energy focus - Maharatna Status: Enhances autonomy and access to capital markets