Ladies and gentlemen, good day and welcome to REC Limited Q1 FY 2026 Earnings Conference Call hosted by Elara Securities Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand over the conference to Ms. Shweta Daptardar. Thank you, and over to you, ma'am. Thank you, Huda. Good morning, everyone. On behalf of Elara Securities, we welcome you all to Q1 FY 2026 Earnings conference call of REC Limited. From the esteemed management, we have with us today Mr. Jitendra Srivastava, IAS, Chairman, and Managing Director, Mr. Harsh Baweja, Director of Finance, Mr. Mohan Lal Kumawat, Executive Director of Finance. We express our gratitude towards the esteemed management of REC Limited for providing us the opportunity today to host this call. Without further ado, I now hand over the call to REC team for presentation, post which Mr. CMD will take over for his opening remarks, and then we can open the floor for Q&A. Thank you, and over to you, team. Good morning, ladies and gentlemen. I shall now take you forward to the investor presentation and the performance highlights for Q1 FY26. Just to remind you all, this presentation has also been uploaded on the stock exchanges and is also available on the website of REC. The presentation has been broadly covered into six areas: REC overview, operational performance, asset quality, borrowing profile, financial highlights, and the ESG initiatives taken by REC. On the overview front, as you know, REC was established in 1969. In more than five and a half decades of its journey, REC has achieved various milestones, some of them being registered as an NBFC with RBI in 1998, then floated its maiden IPO in 2008, which was subscribed 27x. We got conferred by RBI with IFC status in 2010, and thereon we have been appointed by the Government of India for its various flagship Government of India schemes, such as RDSS in 2021, and most recently for the Rooftop Solar scheme in 2024. In 2022, we were conferred the Maharatna status, which is the highest status for any PSU, and we also forayed into the infrastructure sector in India. And I'm happy to inform you that in 2025, very recently, REC became the first Indian public sector NBFC to get ISO 31000:2018 certificate, which is a testimony to our efforts of best-in-class risk management practices. REC has various key strengths, some of them being that it has strong fundamentals and a profitable business. It occupies a strategic position in the growth and development of the power sector. It has the highest domestic credit ratings of AAA from all the four major credit rating agencies in India, being CRISIL, ICRA, CARE, and India Ratings. Internationally, we are at par with the sovereign ratings of India by both Moody's and Fitch at Baa3 and BBB-, respectively. Being a Maharatna company, we are strategically placed in the Indian power and infrastructure and logistics sector. We are nodal agencies for various Government of India flagship schemes, such as RDSS, Saubhagya, Deen Dayal Upadhyaya Gram Jyoti Yojana, and Rooftop Solar. We have a diversified asset base with robust access to diversified funding sources. We have a healthy asset quality with an adequate provision coverage ratio and an experienced management team with sector expertise. We have been funding the entire gamut of power sector value chain beyond conventional generation, including renewables, transmission, and distribution. We have been also funding the infrastructure sector and logistics as well. On the shareholding pattern, the PFC, Power Finance Corporation, remains to be the largest shareholder of REC, with a 52.63% equity of our total paid-up capital. The foreign institutional investors hold 19.16% of our equity as of 30 June 2025. We have been continuously rewarding our shareholders by high dividends year on year. In the last financial year, we have paid a total dividend of INR 18 per share, which was 180% on the face value of INR 10. Continuing that, for the Q1 FY 2026, the Board of Directors has approved an interim dividend, the first interim dividend of INR 4.60 per share, which is 46% of the face value of INR 10. The annualized earnings per share for Q1 was INR 67.60, and the book value per share as of 30 June has reached INR 302.60. On the awards and accolades front, we have been getting various awards in almost all the fields, be it corporate governance, best funding solutions, excellence in green finance reporting, CSR awards, technology awards for generative AI implementations. So you name it, we have it. On the operational performance front, we have made robust sanctions across all the disciplines, as against a total sanction of more than INR 3 lakh crore + in the last year. During Q1 itself, REC has sanctioned more than INR 1 lakh crore worth of projects. And renewable energy remains to be the dominant force, wherein we have sanctioned more than 20% of the power projects. The distribution remains to be the largest area, with 43% of the total sanctions made in Q1 FY 2026. Let me take you through the disbursements. REC recorded its highest-ever quarterly disbursements in Q1 FY 2025-2026, wherein we recorded total disbursements of INR 59,508 crore, which was up 36% from the last year. The renewable energy disbursements were INR 7,233 crore, which was up by 35% from the last financial year. On the outstanding loan composition front, our loan book has reached INR 584,568 crore as of 30 June 2025, which is an increase of 10% from the last financial year. The state sector remains to be the largest area, largest focus, with 87% of our total loan book, and the private sector remaining at 13%. The RE loan book has continuously increased its pace, and now the RE loan book stands at 11% of our total loan book at INR 63,850, which is an increase of 49% from the last financial year. I'll take you ahead with the asset quality of REC. We are happy to inform you that during Q1 FY 2026, REC has resolved one stressed asset, that is TRN Energy, worth almost INR 1,504 crore, resulting in gross NPA coming down to 1.05% as of 30 June 2025, and net NPA to 0.24%. The remaining 11 NPAs, totaling to about INR 6,147 crore, have provision coverage of more than 77%, 77.05% to be precise, which are being resolved through NCLT. Just to again reconfirm you all, there are no NPAs in the state sector, and we are maintaining an ECL coverage of 0.87% on our standard assets, which is as per the ECL methodology under India's accounting norms. In addition to this provision, REC also has reserves in the form of statutory reserves as required under the RBI Act, and also as required under the Income Tax Act, totaling to more than INR 16,000 crore. The borrowing profile of REC remains to be robust. We have the highest credit ratings from Moody's, Fitch, and Japan Credit Rating Agency, at par with the sovereign ratings of India. Long-term domestic ratings are highest, with CRISIL, ICRA, CARE, and India Ratings. Our total borrowings as of 30 June 2025 have reached INR 508,532 crore. We have access to multiple sources of funding, with a mix of international and domestic sources, to meet the business growth. We are also allowed to raise low-cost capital gains tax exemption bonds. I shall now quickly take you through the financial highlights of REC for Q1 FY 2026. REC recorded its highest-ever quarterly net profit of INR 4,451 crore, which was a growth of 29% from the last financial year. The total income reached INR 14,734 crore, again a growth of 13% year- on- year. The net interest income is INR 5,247 crore, a growth of 17% from the last financial year. The loan book has reached its highest-ever level at INR 5.85 lakh crore. The net credit impaired assets have continuously reduced and now are at 0.24%. The net worth of REC has also reached its highest-ever level, which is INR 79,688 crore. The capital adequacy ratio of REC stands comfortably at 23.98%, as against a requirement of 15%, which gives us enough cushion for future growth. On the key ratios front, the yield has improved to 10.08% from 9.99% from the last financial year. The cost of funds is at 7.12%. The interest spread is at 2.96%. The NIM has improved from 3.64% from the last year to 3.74%. The return on net worth has improved to 22.63%. The interest coverage ratio stands comfortably at 1.63 x, and the debt-equity ratio is at 6.38 x. The statement of profit and loss and the balance sheet are also available in the presentation as available on the website of REC. I shall now quickly take you through the ESG initiatives taken by REC. The ESG policy was adopted by the Board of REC in January 2023. From thereon, we have achieved various milestones in various areas, and most recently, we are happy to inform you that the corporate office of REC at Gurugram is being now operated by 100% green energy. As a stepping stone for India's energy transition, REC's lending strategies are tailored to align with India's commitment to harness clean and green energy sources. Till date, REC has sanctioned more than 57,000 megawatt-plus projects, which have the capability of emission avoidance potential of 65 million tons, equivalent to 2.62 billion trees. With this, I shall now request Chairman Sir to kindly give us opening remarks and also give us guidance for the future outlook. Sir, thank you. Thank you so much. Good morning, ladies and gentlemen. It gives me great pleasure to interact with all of you today on the aftermath of our first quarter results. As you all know, REC is a Maharatna GOI enterprise, and we operate in the power finance and infrastructure financing sectors. Our primary borrowers are the state governments, the state electricity boards, the state power utilities, and we also lend to the private sector for all segments of power infrastructure, including renewables. During the first quarter of this financial year, we have sanctioned over INR 1 lakh crore, which is an equivalent of over $12 billion. We have the phenomenal pleasure of recording our highest-ever quarterly disbursement of roughly INR 60,000 crore, which is approximately $7 billion, and it represents an increase of roughly 36% on a year-on-year basis. Our loan book has maintained its growth trajectory, and we have reached our highest loan book of INR 5.85 lakh crore, which translates to roughly $70 billion. We are very confident that our strong fundamentals will continue to drive a very strong demand in both the power sector, the renewable sector, and in the infrastructure sector. And we feel that 12% loan growth can be reasonably achieved in the coming quarters. We are targeting overall this year, we are targeting around 12% growth, and we are very happy that our first quarter has turned out well. We resolved, I mean, we are not only just focusing on growth, but we are also focusing on the quality of our loan assets. This year, we have not had any new addition to our NPAs, and our net credit impaired assets have reduced to 0.24% from 0.82%, and we are targeting to become a net-zero NPA company by the end of this financial year. Our yield on the loan assets has improved to 10.08%, and our spread currently is at roughly 3%, 2.96% to be precise. We have among the lowest cost of borrowing among all comparable NBFCs. Our net interest margin, which is a key factor of our profitability and our growth, and an indicator of our strong fundamentals, has improved to 3.74%, as against 3.64% last year. Going forward, we are confident that our spread will remain in the region of 2.75%-3%, and our NIM in the range of 3.5%-3.75%. Our capital adequacy ratio is very comfortably placed at roughly 24%, as against the adequacy norms of 15%. We have been continuously rewarding our shareholders with timely dividends and share issues. This quarter, we have announced the first interim dividend of INR 4.60 per share, which amounts to a rough dividend payout of approximately INR 1,200 crore. We are very happy with the power sector because the fundamentals of the power sector continue to improve, and that augurs very well for the country. In the last ratings of the discoms which we carried out, the high AT&C losses of previous years have come down to 16.3%. Almost 40 out of 63 utilities saw an improvement in their AT&C losses. The ACS-ARR gap has further decreased by 20 paise per unit. The regulators are issuing timely tariff orders. The utilities are engaging in several best practices, like digital payments, customer engagements, smart metering and automation, safety and workforce training, renewable energy and sustainability, loss reduction and theft prevention. So we are very happy, and we are confident that the power sector will continue to boom. As you are aware, we are the national implementing agency for the RDSS program. We are operating in 19 states out of 34 states. In addition, we are the sole implementing agency of Government of India's PM Surya Ghar: Muft Bijli Yojana, and we are showing very strong performances there also. As on date, against the target of INR one crore customers by end of 2026-2027, as on date, roughly INR 56 lakh customers have already applied, out of which installations have been completed in roughly 27% of the applicants, and so far, we have disbursed close to INR 8,500 crores to these beneficiaries. It gives me great pleasure to announce that REC is the first Indian public sector NBFC to have been conferred with the very prestigious ISO 31000:2018 award. This has been done for our enterprise-wide risk management framework. We are the first Indian public sector NBFC to receive this certification from the British Standards Institution. We continue to hold the highest domestic rating of AAA and international ratings of Baa3, BBB-, and BBB+ from Moody's, Fitch, and Japan Credit Rating Agency, which is at par with the sovereign rating of India. Going forward, we are very, very confident that this quarter and the two quarters to come will augur well for REC. I would like to extend my heartfelt gratitude to the employees of REC, to my entire team, to my board of directors, and in the end, I would like to thank the Honorable Secretary of Power, as well as our Honorable Minister of Power, for constantly guiding us and all the people in REC for their steadfast support and performance. I thank you once again for having participated in today's conference call to listen to us about REC's progress, and I now turn the floor over to you, dear ladies and gentlemen, for your calls. Thank you so much. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Avinash Singh from Emkay Global Financial Services Limited. Thank you, and over to you. Yeah, hi. Good morning. Thanks for the opportunity. Two questions. First one, if I see your Stage 1 and 2 PCR based on ECL model, there seems to be lowering of PCR. Particularly, I notice one in that your electrical and mechanical infrastructure logistics in the state sector. That is where, I mean, you have close to INR 48,000-INR 49,000 crore, and there now the PCR has come nearly zero. Does it have the element of that one of the projects in that Telangana that kind of has moved to a Stage 2, perhaps last quarter, and now has it moved to a Stage 1? And that is what is reflecting here. And on the private side, if I see renewable energy, again, there the PCR has gone materially lower. So were there some accounts that were kind of under trouble last quarter and had come back? So these are questions on the PCR reduction. And the second question, if you can help me understand a bit better the underlying mechanics of what is kind of leading to this INR 576 crore of fair value losses, probably on your, I mean, your derivatives marked to market. So how exactly the sort of mechanics working and how it will sort of work going forward? So these are my two questions. Thank you. Good morning, dear. That is first regarding your expected credit loss. There, if you see that perhaps you are talking about the infrastructure sector, infrastructure core, where the provision coverage ratio is 0.07%. So it is just because of these are the government-guaranteed loans, and they have lesser, this PD and the LGD. So with that reason, their coverage ratio is a little lesser than that. Similar is the case of renewable energy. There we have the agencies that are the better rated agencies. And in those cases, the PD and the LGDs are lesser than as expected, too in case of other borrowers. And if you see that we used to maintain the minimum 0-point threshold of ECL provisions on total basis, not on the agency-to-agency basis. So in case if you see that against my 0.4% coverage of Stage 1, the average total coverage is around 0.90%. Whereas for Stage 2, where the minimum requirement is 0.5%, my total is 0.87%. So we are well above the minimum threshold limit, and the sufficient coverage is available. Your second question was about the derivative losses. Yes, some of the derivative losses are there. That was our INR 1 lakh hedging that is with respect to that CHF dollar. So in case the CHF got stronger against the dollar, so that has given us some losses. But taking those losses into account, our cost of borrowing is still well within the limit and much better than the peers. Thank you. Okay, thank you. Thank you. The next question is from the line of Shreya Shivani from CLSA. Please go ahead. Yeah, thank you for the opportunity. I have two questions. First is on the RBI final regulation, which has been announced, and that becomes applicable from 1st October. So is it fair to assume that from the third quarter onwards, again, your standard asset provision will be on rise because every new project that you will disburse will be in the construction phase, and that means the 1% standard asset provision will continue? Now, my question is, will you pass all of it through the P&L, or will you be accounting for it in your reserves in your net worth? That's my first question. Just trying to understand what changes from third quarter onwards for you all. My second question is on the Kaleshwaram Project of Telangana state. I mean, this is a broader question that I read many media articles that there have been some study done by the Union Government, some committee, which said that the project is very unviable, and it's been constructed wrong or something like that. What is our assessment of the same? What do you think is the solution on the NPA? I understand it's a government project, so it may have state government guarantee. But just want to understand your perspective on this. Ma'am, regarding your first question, the new prudential guidelines are to be implemented from 1st of October. And therefore for the under construction project, the provision gaps increase from 0.4%- 1%. But that will be taking into effect from prospectively from 1st of October. So in that case, if any amount released on the schemes to be documented from the 1st October onwards, there we will have to make some additional provision. As I have just mentioned, against the minimum 0.4%, we are already making a provision of around 0.9%. So it is not going to make much of a difference for us. If you see, even if I disburse, say, around INR 20,000 crore in the next two quarters out of the new sanctions and documented post implementation of this new circular, I will have to make an additional provision of 0.5% that costs me around INR 100 crore. As regards to your supplementary question regarding that, REC is an NBFC following the Ind AS. So for the Ind AS, even if I have to make the provision as per the RBI mandate, that is not passed through the profit and loss account. That is passed through the impairment reserves account in case if the provisions as per the RBI direction or RBI guidelines is more than the amount calculated as per my ECL. So still we have a margin left with that. My ECL provisioning is much better than the minimum prescribed by the RBI. But yes, we may have to change our guidelines. That we will evaluate it, and in case if needed, then we may change our guidelines also. But it is not going to make much of the effect. Second, regarding Kaleshwaram, Kaleshwaram project was once sanctioned in 2021 and 2021-2022. That was the basic premise of the project is that the project was coming from the government. In case if any of the projects is coming from the government, we generally treat that the state governments are equally responsible for that. And we had funded this project against the government guarantee as well as the budgetary provisions. We are ensuring, and we are taking on record from the state governments that they make the budget provision so that our repayment doesn't get hampered. If you see the past performance of the project, the project is progressing. As far as my repayments are concerned, yes, that is there in Stage 2 for the last one and a half year. But they are making the payment every quarter, every month. They are not slipping it away in Stage 3 as such. So we expect that the things will be a little better from now onwards, and we expect that they will make the payment, and this will be standard assets after some time. But till then, we are not expecting that this will be slipped into the Stage 3 assets or it will become NPA assets. Thank you. Got it, sir. Just one follow-up question. Can you also give us the Provision Coverage Ratio for Stage 1 and Stage 2 separately? You've given it together. Stage 1, it is 0.87%, and Stage 2, it is 0.90%. Thank you so much. Thank you, and all the best. Thank you. The next question is from the line of Abhishek Puri from UBS. Please go ahead. As there is no response, I'm taking the next question from Abhijit Tibrewal from Motilal Oswal. Please go ahead. Yeah, good morning, sir. Am I audible? Yeah, very much. Sir, two questions from my side as well. Thank you again. So first thing is, I mean, this quarter, we have done a disbursement of almost INR 18,500 crore in distribution CapEx. So typically in the past, I mean, sanctions or disbursements towards this segment used to be very low. So what is it exactly if you could just help us understand, please? Sir, as far as the distribution is concerned, some CapEx have increased, and simultaneously, some of the special loans have also been sanctioned to the distribution companies. As far as the regulations are concerned, the Discoms can take a working capital loan of 35% of their revenue of the preceding years. So these alone have been sanctioned within those limits, and we are abiding by those limits also. While funding these projects, we take into account that, yes, total funding doesn't exceed that limit. So these funds have been granted against those limits, and these are secured against hypothecation of the assets or the government guarantee. Got it. And sir, are we referring to that same split that we gave in the sanctions and disbursements, what we call as distribution CapEx? So are these working capital loans, which you explained, is 35% of the revenue of the preceding year, basically within the limit of 35% revenue of the preceding year? Correct, correct, correct. Any special loans, if that is being used for the working capital requirement, that will fall within that 35% category. Got it. So sir, why call it CapEx then? Why do we call it CapEx? We have mentioned against the distribution scheme, sir, and against the distribution as it covers CapEx as well as non-CapEx also. Got it, sir. This is clear. Thank you so much. The second question I have is around the provisioning and the credit costs in this quarter. So while we called out, sir, in your opening remarks that TRN Energy, we have restructured, and which is why it has led to a release, ECL release of almost INR 270 crore. But if I look at the credit cost in the provisioning line item in the P&L, we have taken a provision write-back of almost INR 610-INR 620 crore. Just trying to understand, are there some utilities which were downgraded in the last quarter and have got upgraded in this quarter? Is there something like that which has led to some release of provisions? Yes, it is very much there. TANGEDCO had increased from C - to C. So some provision reversals are also there. And there were, in some of the cases, the physical progress was a little better than as compared to the previous quarter. So in that case, there was an LGD change impact. Similarly, additional provision has been made for around INR 295 crore. So basically, it is on account of the change in the rating from C - to C of the TANGEDCO. And coupled with some of the smaller agencies, they also got their rating improved. Got it. So sir, just to kind of summarize this, this almost INR 620 crore of provision reversal that we saw, almost INR 270 crore was on account of TRN Energy. And the remaining, like you explained, is TANGEDCO's, which got their rating upgraded from C - to C. Correct. TANGEDCO is around INR 680 crore. And COD change impact is around INR 106 crore. EAD change impact is around INR 295 crore. So total comes around INR 620 crore. Got it, sir. This is useful. And sir, last question that I had was around this RDSS. I mean, from what I understand, and please correct me, sir, from what I understand, RDSS has a sunset date of March 2026. So I'm just trying to understand how much more would we be able to disburse under RDSS for the next three quarters. When we say the sunset date is March 2026 for RDSS, does it mean that whatever is sanctioned till March 2026 can be disbursed in FY 2027? Or is it that all disbursements under RDSS will come to a stop from March 2026 onwards? I'll reply you in two parts. One is regarding subsidy. So the sunset date for the subsidy is 26. But most of the states have already requested to the central government for extending the timeline for the schemes. And we also expect that it should be increased. Some of the work has already been left. Those awarded works are to be completed. So if that gets extended, the subsidy will be released within the timeline extended also. As far as my loan is concerned, I can disburse the loan beyond the timelines also. That is not an issue. That is a separate scheme. Before the closure of the scheme, I can always fund those schemes as disbursements. Got it, sir. This is clear. Thank you very much for patiently answering my questions. And I wish you and your team the very best. Thank you. Thank you very much. Thank you. The next question is from the line of Chintan Shah from ICICI Securities. Please go ahead. Yeah, thank you for the opportunity. So sir, one question on the competition front. So now with a steep rate cut of INR 100 over the past four, five months, so how do we see the competition from the banks, particularly on the refinancing side for the transmission projects? And also due to this, do we anticipate some pressure on our yields? So yeah, that's the question. If you see that during the quarter, we have been able to maintain our spread and the NIM as well as the yield also. So we expect that even in case if the yield gets lower in the quarters to come, our cost of borrowing will also be a little lower. So with that, we'll be able to maintain the NIM and the spread. What was your second question? So that was the only question. So basically, I just wanted to understand more on the competition and will that be impacting any growth? And also sir, now also in terms of our borrowing, so how much of that would be floating means which would get the benefit of the rate cut? And on the yield side, how does the repricing happen? Is it an annual reset or a two-yearly reset or how does it work? Yeah. Actually, if you see my loan book, it has around 30% is of three-year reset and around 60% is of one-year reset. 48% how much? 48% one-year. 48% is one-year reset. And how much is three-year? 28%. 28% is three-year reset. So even if I change my loan rates today, the benefit will be passed on after completion of one year. In case of three-year, it will be passed on after three years. So it is not going to affect my yield as well as my earning on this account. So whatever the benefit will be passed on, that will be compensated by the reduction in the borrowing cost. Is that a fair assumption? Yeah. Yes, that is what I'm saying. As far as my borrowing books are concerned, almost 20% gets matured in one year. So less remains the same for the next three years. So the 20 years which I replenish with the new borrowing will come at a lower rate. I think so. Yeah, that is very clear. Yeah, thank you. Yeah, that's it from my side. Thank you. The next question is from the line of Manish Agarwalla from PhillipCapital. Please go ahead. Yeah, thanks for the opportunity. So I have two questions. One is, if I see the repayment rates in conventional generation and transmission segment, those have increased, and that has been increasing for quite some time. Are these regular repayment, or is there any element of prepayment or refinancing there? That's one. During this quarter, we have got a prepayment of around INR 15,000 crore, of which if you see around INR 5,000 crore or around INR 6,000 crore was the prepayment. That was mainly of one from the NTPC, and second is from the Adanis. NTPC is a AAA company. They could raise the funds from the bond market. So that is why they have made the prepayment. And as regards to Adani, that is regularly they used to churn their portfolio. And sometimes what happens that because of creating headrooms for the new sanctions, they used to prepay to us. So once they prepaid this amount, the headroom was created, and they have submitted four schemes to the sanctions, and we'll be sanctioning the scheme shortly. And the rest, most of the amount is coming towards the RBPF scheme. Got it? Yes, yes, yes, sir. So the rest of the amount out of the INR 15,000 that has come, that is part of the RBPF schemes, where the scheme itself permits that they can make the prepayment, giving a three-day notice to us. So that will continue to happen on every quarter. In case if the Discoms have the funds available with them, it is better to make the prepayment so that the Discoms also become vigilant and cautious about their borrowings. Similarly, once they prepay the amount to us towards the RDSS scheme, they can get it again replenished, or they can take the funds again from us for further disbursement in the next quarter. Got it. That's clear. Next question is about your core infrastructure segment. So if I see over the last couple of years, you have sanctioned INR 1.4 trillion worth of loan, whereas the disbursement has been just INR 18,000 crore. Just wanted to get your sense, are these sanctions still valid, or are these projects getting delayed? That's one. And also if you can add that recently you have signed MOU with the government of Maharashtra worth INR 1 trillion for infra projects. So overall, your take on how this pays to the move going ahead, that's it from my side. As far as the infrastructure projects are concerned, the funds are being disbursed on the request of the agencies. And sometimes what happens that because of their cash flow requirements, they used to draw the funds at a later date. So these schemes are still valid, and the balance funds, in case if they're required by the agencies, except one or two of the E&M component schemes, the funds will be released in all other schemes. As regards the MOU with the Maharashtra government, that was the MOU happened not only with the REC, but with most of the agencies. We expect that some of the schemes, whether from the power sector or from the infrastructure sector, that will be proposed to REC and will be sanctioning those schemes, but that will take later tim e. Got it, sir. Thank you very much. Thank you. The next question is from the line of Shreepal Doshi from Equirus. Please go ahead. Hi sir, good morning, and thank you for giving me the opportunity. So my first question was on the provision split. So if you could give us the details, like for example, while there has been reversal during the quarter, but as you highlighted to the earlier participant that INR 270 crore was because of the PCR, and then because of some of the accounts being upgraded, also there was some reversal. But wanted to understand the split of the same because you would have provided fresh provisioning towards the disbursement that you have done during the quarter, right? So if you could give us some more details of this provision split, wherein you have seen INR 616 crore of reversal during the quarter. Sir, if you can note it down that regular ECL provisioning on the incremental lending is around INR 295 crore. Then provision reversal is around INR 605 crore, of which the majority from the TANGEDCO, where the rating has been increased from - C to C. Then there is a change in the LGD, which has resulted in reversal of INR 125 crore. Then there is an additional provision made due to delay in COD, that is INR 106 crore. Then there is a reversal in case of TRN, that is a restructured account. That reversal is around INR 272 crore. And other floor change in the ECL rate is around INR 16 crore. So the total net reversal comes around INR 620 crore. Okay, okay. And so this LGD change is because of what reason? Like what would have benefited us there? Broadly, the rating upgrade would have benefited us there as well, or anything else? Somewhere the progress has happened, so that may be the reason. There are various reasons for there. The rating change is one of the reasons. Okay, okay. Got it. So the other question thank you for that detailed answer. So the other question was on the RBI policy on the provisioning part. So while you gave a detailed answer on that as well, but just wanted to understand that will we have an for the incremental disbursement, will we have a differential pricing wherein we will try to take an impact of this additional provision requirement? Because on the risk-adjusted basis, would we want to implement that as a policy, or will we still continue with the normalized pricing policy that we have? I think during the year itself, it is not going to make much of the impact on our financials. And ultimately, whenever we fix the price, we have to be market competitive. So we'll see the market, and then accordingly, we'll take the decision. Okay, got it, sir. So just the last question, please please. Which are the projects incrementally that we are anticipating to get resolved over the next couple of quarters? And how is the exposure there and the provisioning there? We expect that by the FY 2026 end, all the projects, we expect that it will be resolved. If you see that Hiranmaye, Bhadreshwar, Sinnar, these are at the advanced stage of resolution. Similarly, two agencies, Global Metal, Siti Energy there, and Bhavnagar, they are very much under discussion with us, and some formula will be worked out, and these are already under discussion at the advanced stage. There are five other projects that are Maheshwar, Konaseema, Jas Infra, Ind-Barath, Lanco, Vidarbha. These are under liquidation, and most of the sets have already been sold, and we have already made 100% provisions against those. So whatever comes against these schemes will be an income for us. So we expect that we have already reversed INR 270 crore against TRN, and we further expect that in case if all these assets are resolved, the total reversal would be around INR 700-INR 800 crore during the year itself. That is the minimum which we are expecting. Got it. That is including this INR 270 that you have already seen being reversed this quarter. What do you want to hear from me? It is an additional. Okay, okay. Thank you, sir. That is very helpful. Thank you, sir. Thank you for answering all the questions, and good luck for the next quarter. Thank you. The next question is from the line of Sanket Chheda from DAM Capital. Please go ahead. Hi sir, good morning, and congrats on a good set of numbers. While a couple of my questions got answered, I just had one thing on growth. You said that we'll do 12% comfortably. Is that 12% a conservative guidance in your mind, seeing how Q1 has led basis higher disbursement and also 3% plus quarter-on-quarter growth? So have we been conservative there on growth, or we feel that 12% is the max that we'll be able to do? Sir, as far as the growth is concerned, this quarter, if you see that we have made one of the best disbursement, and that is the highest disbursement during the quarter, that has added the INR 17,000 crore to my loan book from INR 566,000 crore in the Q4 FY25. Since my Q4 was flat, had there been a little bit growth of even INR 5,000 or INR 10,000 crore, my growth would have been more than 12%. But still, we are keeping a target of 12%. We'll review it on quarter-to-quarter basis, and this target we'll strive to achieve during the year itself, and it will be on the yearly basis. Sure, sir. And on margins, if I did right, you said that we will be able to maintain the margins at current levels, right? Because of the benefit on the cost of funds that we are going ahead. Yeah, we'll be able to maintain the NIM around 3.5%-3.75%, which we are already at 3.74%. And similarly, spread would be between 2.75%-3%. Okay, sure. Those were the two questions. Thank you. The next question is from the line of Sarvesh Gupta from Maximal Capital. Please go ahead. Good morning, sir, and congratulations on a steady set of numbers. Sir, just one thing on the growth part. So if we see our loan book growth, it has steadily come down from 17%-18% to 10% in this quarter. Now, if I look at your numbers, your prepayments plus repayments in FY23 used to be only 6%-7% of the opening loan book. So that 6% has climbed up to 20% in FY24, and last year, sir, it was 26%. So almost one-fourth of the loan book, which was starting in FY25, was not there. So this has been the main reason why, sir, we are disbursing more and more, but the runoff from our loan book is very high. So how do we see this situation? What is the main reason behind this? And in terms of how we are engaging with our borrowers, can we put some conditions in our term sheets so that this runoff, which is very high, can be arrested? Because the question now is not related to disbursement, but the runoff. That is actually the main factor why our loan book is not able to grow at a higher pace than what it was earlier. In fact, during the conference of Q4, we had explained that wherever the payment was received, there were some certain reasons for that. It is not that because of the pricing, those repayments were made. Similarly, during the quarter one, except the NTPC, which is a AAA company, and they had been maintaining their account for the last several years with us, they made the prepayment to us. Otherwise, the rest of the accounts are the normal part of the business. It is not because of the pricing. We also know how to compete with the market, and that is why we are keeping, for the renewable sector is concerned, our rate of interest is a little at the lower side. And as regards to others, we are very much competitive with our peers, and that is why we have been able to maintain this growth. So if you see during the quarter, out of the INR 15,000 crore, INR 6,000 crore is around the prepayment. That is the prepayment. The rest is around RBPF schemes. As I have already explained, RBPF schemes, against that, the repayment will keep on coming. And once the repayment comes to us, that is, if any repayment is made, they again get the disbursement in the following quarters. So that is the regular business. And if you see if any of the agencies are making prepayment to us, we treat that as a healthy business practice. Since those are the strong agencies, they are able to make the prepayment to us. So we should not be very much afraid from the prepayment that will keep on coming. But yes, it should not affect my business, and that is very much within the controls. As I asked, on the term sheet itself, are there some levers that we can use to not allow so high rate of repayments or repayments? First of all, I am not agreeing with what you said, that high rate of repayment. That is not the case. Secondly, yes, I am very much agreed. We should have the conditions in the sanction letters so that even if they want to make the prepayment, they should deter from that. We have prepayment policies. So in case if they make the prepayment to us, that will be against some of the prepayment charges. So that is a deterrent factor, which is available in my terms of the conditions. Okay, sir. That's all from my side. Thank you. Thank you. The next question is from the line of Raghu Garmela from Travers Capital. Please go ahead. Hi, good morning. Most of my questions have been answered. But regarding the net gain loss and the fair value charges, I just want to find out if, suppose the Rupee devaluation is further, would we see some charges appearing in this quarter and next subsequent quarters, or is this just a one-off thing for this quarter? Actually, if you see in our case, wherever the foreign currency has been raised, that is very much protected against the Seagull option of hedging. So the Seagull option is tested on the day of the settlement. So we cannot make any comment as of now. But as of today's date, there is nothing to worry. But yes, all will depend on the day when it is tested on the day of the settlement. So there is an option. There is a probability that I may get a rebate also in the next quarter, just to understand the nature of the problem. These are the settled businesses which have already been taking place. So there will not be write-backs against that. And we have the options also. If we see any kind of threat to any of the seagull limits available with us, we also get it increased by paying extra premium for that. That is a regular practice from our side. And we keep on watching our portfolio every day, and we take the preventive actions also. Just one last question. Please don't mind me asking and raising one of your competitors' names. Recently, I was on the IRFC con-call, and because of their unique structure and things like that, they are looking at a spread of just 100 basis points- 150 basis points on any infrastructure loan. And I heard from the management saying they are ready for giving any infrastructure loan, not just railway-linked infrastructure loan. So do you foresee these kinds of new companies, PSU companies with similar borrowing costs as ours, being a competition to us in the future? So I'd like to come in here. Number one, I'd like to say that each PSU and their management and their boards decide what they want to do and whether they want to price aggressively, whether they want to have a low spread or whatever. So I would not like to comment on whatever IRFC is planning to do. That is entirely within their call. But as far as competition is concerned, number one, let me say that the pool is huge. Whether we are talking about the infrastructure sector, whether we are talking about the power sector, the lender queue and the borrowers and the potential for borrowing is huge. Number one. Number two, I would like to also say that our management also, if it feels that we need to act in a particular manner, depending on case-to-case basis, we take individual calls. So while all of us are operating in the same sphere, I think, number one, that the pie is fairly large, and I don't think there is too much competition. And we also have our own sectoral priorities. While IRFC may foray for some time into infrastructure or power or whatever, ultimately, their root sector, the railways, will also cry out for their investments. And I'm sure the railways would not like them to invest in infrastructure at the expense of investing in railways. So I think we should leave it to the management of the various boards to take these business calls. The business call to foray from one sector to another depends on a lot of factors, most of them very, very temperamental. So it is not possible to take a long-term view on these points. I hope you just know we are not. Yeah, you've been perfect, but we are not at all seeing any threat to a particular position, right, according to you? No. This quarter, we disbursed INR 60,000 crores. If you look at the disbursements of other companies, and specifically, if you talk about IRFC, you might like to see how much they have disbursed and how much we have disbursed. You might like to take a look at their loan book and take a look at our loan book. I would not like to quote the figures. You're a smart person. I'm sure you can do your own math and your own logic from that. Sure. Yeah. The only reason why I'm asking is that? I'll supplement what Sir has said. If you see that ultimately, whatever you earn, that is subject to the tax, as well as the dividend to be paid to the shareholders. So whatever left, I have to decide whether I have to go for the growth or not. Ultimately, I have to remain in the business. If I have to remain in the business, then I need the capital also for the next years to come. So I don't know how much NIM would be sufficient for them to grow at a rate at which they want. So it is their call, but we are working well within our financing products. Just to supplement one more point, which our Director of Finance has just mentioned, please remember whatever NIM or spread that we earn ultimately goes to shore up our capital reserves and increases our reserves and surpluses, which further increases our potential to lend to this sector. Now, if somebody comes in with a very low spread, you can yourself determine whether they are in for the long term or whether they are a short-term player. An entry on a very low margin is, I don't think, it's a long-term strategy. So an indication of a 1% spread is the first indication that you are in for the short term. And the borrowers also should take a cue from that and see whether they would like to borrow from a short-term player or from a long-term player. Fantastic. Your answer. The only reason why I'm forced to ask this question is because of the decrease in the loan book growth from maybe 16%-17%- 12%. This is kind of creating all kinds of doubts if really REC is competitive and is really able to compete with the other players and increase the loan book. So that is the only reason why these doubts are creeping up? Let me ask. Let me Let me pose a counter question. Do you expect the power sector to grow at 18% for the next 50 years? Not just power, but infrastructure. We are into multiple segments right now, right? Just look at the infra also. What is the general growth of the infrastructure sector? See, every sector will, in its infancy stages or in its early stages, show a spurt of growth. And after some time, it plateaus, it reduces, and then it maintains a very steady growth trajectory. So see, every sector starts out like this. You might have 20% growth in the first phase. Then you might have it will come down to 18%, then it will come down to 15%, then it will stabilize at 12%, or it will come down to 8% or 10%, depending on the potential for that sector. So each sector has its own growth trajectory. It will have its own equilibrium. We are in the power sector for the last 50 years. I personally think there was a time when interest rates were very high that saw a lot of borrowers coming in. At that time, when the interest rates were very high, there were very few players. Then gradually, the sector consolidated, started delivering. Interest rates came down. Then once people got assured that this is a stable market and it is not prone to too many risks, that saw the entry of many more players. That That drove down the interest rates further. And now the sector, I think, I think it's still in a growth phase, but somewhere down the line, we will hit some equilibrium. And I personally think if you are a long-term player, you need to watch out these trends in the market and see how the sector is progressing. So I think we are bullish about the power sector. And the mere fact that so many parties are coming into the power sector is indicative of the fact that they are seeing growth. So we are fairly bullish. Again, I will emphasize, see, the borrower may temporarily get swayed by slightly aggressive interest rates, temporarily. But he also realizes, the borrower also realizes that he is also there for the long term. So ultimately, he will switch to a long-term player. Okay. That's really helpful. Thank you so much for the clarification. Thank you. The next question is from the line of Puneet Bahlani from Macquarie. Please go ahead. Hello. Am I audible? Yeah, please. Yeah. So I said two questions from my end. Firstly, on the infra book, if I see we have grown around 15%. It is higher than the current loan growth. But what are the plans here? Are we planning to grow at a faster pace, because I'm asking this because private sector CapEx is kind of muted, and banks are also not going heavily on the CapEx front. So do we have kind of a mandate or something to grow? And I'm assuming that the current mix is broadly, it's mainly government projects, right, in the current infra book. Secondly, if you could just repeat on the reset periods that you mentioned, I think you mentioned 48% is three-year. Sorry, 48% is one-year reset. On the two-year and three-year reset, if you could mention, what is it? Yeah. That's all. Sir, as far as the infrastructure sectors are concerned, as we have already mentioned that we are going, we are very choosy while selecting these projects. And in case if the project is self-revenue sustainable, then we are going for that kind of infrastructure project funding. We are not in a hurry for funding the infrastructure projects since our hands are full with the power sector projects. That is evident from the disbursement taken place during the quarter one. We have achieved the highest-ever disbursement of INR 60,000 crore. So we'll have the same strategy in the next two or three quarters of the year. So in case if any good projects come, then in that case, definitely, we'll fund the power sector of this infrastructure project. Otherwise, since the ample opportunities available in the power sector, we'll continue to have the focus on the power sector. As regards the loan book is concerned, one-year loan book is around 60%, and three-year loan book is 30%. Got it. Got it. Got it. Yes. Thank you for this. And on the infra book, majorly currently, of the outstanding book, everything is government projects. Most of it is government projects, right? Yes. Most Most of the projects are the government projects. These are secured against the government guarantee. Got it. Got it. Got it. it. Thank you so much, sir. Yeah. Thank you. We will take that as our last question for today. I now hand the conference over to the management for their closing comments. Thank you so much for the call today. And we thank all the participants for taking their time out to attend this call. And we look forward to similar such interactions in the coming quarter. Thank you. On behalf of Elara Securities Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you very much.