REC eyes 10% revenue growth to `28,000 crore this fiscal

New Delhi: State-run REC is expecting an over 10 per cent growth in its revenue at Rs 28,000 crore in the ongoing fiscal on account of "excellent" performance. REC, a public infrastructure finance company in India's power sector, had a turnover of Rs 25,310 crore in the 2018-19 fiscal.

The company's main source of revenue is interest income from advances or loans. In a Memorandum of Understanding (MoU) inked on Friday with its holding firm Power Finance Corporation (PFC), REC has targeted to achieve Rs 28,000 crore revenue from operations this fiscal in view of "excellent" performance scenario.

According to the MoU, the company's performance would be considered "very good" if it achieves Rs 27,000 crore net revenue from operations and "good" at Rs 25,000 crore turnover this fiscal.

REC Ltd, formerly Rural Electrification Corporation Ltd, has signed a performance-based MoU which has detailed contours of various targets to be achieved in 2019-20.

The MoU has been signed by PFC chairman and MD Rajeev Sharma and REC chairman and MD Ajeet Kumar Agarwal here on Friday.

The MoU contains various parameters relating to financial -- for example, revenue from operations, operating profit as percentage of revenue from Operation. PAT (profit after tax) as percentage of average net worth and non-financial parameters viz, human resource management and sector-specific result oriented measurable parameters.

Every year, the state-run firms ink such MoUs with their parent ministries. But this year, REC has entered into this MoU with PFC, which is its holding company.

PFC had acquired 52.63 per cent shareholding of the the central government in REC for Rs 14,500 crore in March end. Since REC is a subsidiary of PFC, the two firms have inked the MoU. Earlier, REC used to ink such agreements with the power ministry.