REC Limited (RECLTD) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to REC Limited Q2 FY '26 Earnings Conference Call hosted by Elara Securities India Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Shweta Daptardar. Thank you, and over to you, ma'am.

Thank you, Sravani. Good morning, everyone. On behalf of Elara Securities, we welcome you all to Q2 FY '26 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. TSC Bosh, Director of Projects; Mr. Mohan Lal Kumawat, Executive Director of Finance. We express our gratitude towards the esteemed team of REC Limited to provide us the opportunity to host this conference call. Without further ado, I now hand over the call to REC team for investor presentation followed by opening remarks by Mr. Jitendra Srivastava, Chairman and Managing Director, post which we can open the floor for Q&A. Thank you, and over to you, team.

Thank you so much, and good morning, everyone. I shall now take you through to the investor presentation for the half year FY '25-'26. Just to inform you all, this presentation has also been uploaded on the website of REC and is also made available on the stock exchanges in compliance of the SEBI norms. The presentation is broadly covered into 6 areas, of which the first is the REC overview. As you know that REC began its journey in 1969 to develop power infrastructure sector rural areas from there on, it has graduated manifolds. And in 2022, we were accorded as Maharatna status, which is the highest status for any public sector entity. And therein, we also forayed into the power -- infrastructure and logistics sector in India apart from the entire value chain of power sector. We have the highest domestic credit ratings of AAA, international rating of Baa3 and BBB- at par with sovereign ratings of India. We have a Nodal Agency to flagship Government of India’ Power Sector Programs. In fact, we are the first Indian public sector NBFC, which is compliant with ISO:31000 risk management framework. We are a major player in the renewable energy segment and creation of India's Green Energy Corridor. We are also one of the strategic player in India power sector, infrastructure and logistics sector. We are a trusted Government of India's arm, where we are supporting Government of India in various flagship schemes, such as RDSS, Saubhagya, Late Payment Surcharge, Consumer Services Ratings of DISCOMs, and Integrated Ratings of DISCOMs, Deen Dayal Upadhyaya Gram Jyoti Yojana, NEF and most recently the Rooftop Solar Scheme. We have a diversified asset portfolio across power sector value chain that is conventional generation, transmission, distribution, renewable energy, and we have also divested our portfolio into infrastructure and logistics sector as well. We have won various awards and accolades and the most recent being we have been awarded the Best Financial Services Company by Dun & Bradstreet. We have also been awarded the Sustainability Icons Award for excellence in ESG Initiatives. To take you through to the financial highlights for the half year, this half year, we have recorded our highest ever profits of INR 8,877 crores, which is a growth of 19% from the last year. Our total income has increased to INR 29,828 crores, that is a growth of 12%. The net interest income increasing to INR 10,608 crores, a growth of 15%. The loan book has reached to INR 5.82 lakh crore, a growth of 7%. The net credit impaired assets have reduced to 0.24%, and our net worth had reached its highest ever level of INR 82,739 crores. The capital adequacy ratio is sitting comfortably at 23.74% as against the RBI requirement of 15%. On the profit and loss side, our half year profit were at INR 8,877 crores, in which the interest income on loan assets was INR 28,686 crores, and the net interest income of INR 10,608 crores. The total comprehensive income was INR 7,081 crores. The key ratio, the yield on loan assets for the half year was 10.06%, the cost of funds at 7.17%. The consequent interest spread was 2.89% and the NIM comfortable at 3.64%. The return net worth has increased to 22.14% and the interest coverage ratio is comfortable 1.62x. The debt equity ratio or the gearing ratio of the company has improved 6.07x. On the operational performance of REC, we recorded our highest ever half yearly disbursement of INR 1,15,470 crores in this half year, which is a growth of 27% from the corresponding half year of the last financial year. In the Q2 itself, we have disbursed close to almost INR 56,000 crores, which is a growth of 18% from the corresponding quarter of the last financial year. The distribution segment has constituted the large area of disbursement at 69% followed by conventional generation of 11%, renewable also up 11%. Consequent to such higher disbursement, the outstanding loan assets have increased to INR 582,167 crores as of 30th of September 2025, of which the state sector constitutes 86% of the portfolio and the private sector, 14% of the portfolio. On the segment-wise reporting, 27% of our total AUM is in conventional generation, 12% in renewable energy, 8% is into transmission and distribution constitutes 40% of our total loan book, while the infrastructure and logistics sector constituted almost at 10%. The borrowings of REC has reached to almost INR 507,000 crores at 30th September 2025, which is diversified across all the areas of finance. To take you through to the asset quality, continuously improving the asset quality of REC. The gross NPA have reduced to 1.06%, and the net NPA have reduced to 0.24% as of 30th of September 2025. On the NPA, we have been maintaining a provision coverage ratio of 77%. And on the Stage-I asset itself, the provision stands at 0.86% and these Stage-I assets are roughly 96% of our total asset book. The Stage-II assets are about 2.77% of the total loan book, wherein we are -- we have created a provision of 2.10%. The Stage-III assets or the NPA assets are currently at 1.06%, where the provision of 77% has been created. And we are happy to inform you that in a continuous improvement of our asset quality, the Stage-II assets have been reduced by 52% in this current quarter itself from the last corresponding June quarter, where we have received a prepayment -- we have recovered a prepayment of INR 11,400 crores from Kaleshwaram Irrigation Project, which was a Stage-II asset till 30th of June 2025. These remaining NPAs or the credit impaired assets are in advanced stage of resolution. We have a total of 11 assets, of which 10 under NCLT, where a provision 77% is there, and 1 project worth INR 12 crores is also being pursued outside NCLT with a provision of 20%. Now to take you to our shareholder outlook, we have been consistently paying the highest dividend. And in fact, the Board of Directors has approved an interim dividend, the second interim dividend for the quarter of INR 4.60 per share, which is in addition to the INR 4.6 per share, which was declared for the Q1 as well, thereby meaning a total dividend of INR 9.20 per share for the half year ended 30th September '25. The earnings per share has improved INR 33.71 per share and the book value at INR 314.21 per share. The shareholding pattern of REC has been given in the presentation, where you can see the PFC was up 52.63% of our REC share when the FI hold almost 18% of the total liquidity of REC. I'll quickly take you through the ESG status of REC, where we formalized our ESG policy was adopted by the Board in Jan 2023. And most recently, in August 2025, we have published our second ESG report, which is reference to GRI format submitted to CDP responses. We have taken various ratings from ESG. And in fact, our renewable loan book has grown by more than 3x in 5 years, which gives commitment of our ESG framework. In the last so many years, we have sanctioned about 61 gigawatt plus of renewable energy projects, which have an emission avoidance potential of 71.2 million tonnes, equivalent to 2.85 billion trees. The ESG and its highlights have also been given in the presentation. With this, now I'll request CMD sir to kindly give us the opening remarks.

Thank you so much, Supreet. A warm welcome to my colleagues on the Board and a very warm welcome to all the investors, who have tuned in to listen to our conference call. A very good morning to all of you. As all of you know, Supreet has just given you the basic statistics with regard to the performance of REC, and I'm very happy to declare that the first half of '25-'26 has been very good for REC and for its shareholders. A few notable highlights. I would just like to reiterate, they have already been spelled out, highest ever half yearly sanctions of INR 2.5 lakh crores, that is almost $28 billion were sanctioned in comparison to roughly INR 3.37 crores of the same period last year. So we are looking at a growth of -- in sanctions of almost 34%, which is fairly large in any terms. Even if you look at actual disbursements, REC recorded its highest ever half yearly disbursements of INR 1.15 lakh crores, which is almost USD 13 billion, which is an increase of 27% over last year same time. Our loan book has increased by 7%. We have received prepayments of almost INR 49,000 crores, that is $6 billion. Had this prepayment not been received, the growth in the loan book would have been almost around 16% on a year-on-year basis. Now let me clarify one thing. These prepayments that have been received are those prepayments, which have primarily come from the -- our borrowers returning their prepayment due to internal accruals and a certain part of it has come from, almost INR 16,000 crores have come from -- sorry, INR 11,000 crores have come from the Kaleshwaram Irrigation Project, which has ensured that our Stage-II assets have reduced by almost 52%. So this we consider as a major achievement, and we are very happy that today, REC has a committed order book of nearly INR 2.5 lakh crores, which will support future growth. We estimate that even if we continue our disbursement at around 9% to 10%, we are confident of getting 11% to 12% loan growth in the coming years. As all of you know, we have very categorically said that by 2030, our loan book will touch INR 10 lakh crores, out of which the renewable sector, we are anticipating it to contribute to 30% of our loan book, which is INR 3 lakh crores. I would like to inform all our investors and our shareholders that we are well on track to achieving this. We are maintaining a steady pace. We are moving up to our target, and we are very, very confident that come 2030, REC will be INR 10 lakh crore loan-book company. Continuing this point, REC has recorded its highest ever half yearly profit of almost INR 9,000 crores, which is a growth of almost 20% on a year-on-year basis, and our net worth has grown by almost 15% over last year. Continuing our stakeholder engagement. We are very happy that we have declared the second interim dividend also of INR 4.6 per share. This works out to almost INR 9.2 per share on a face value of INR 10 per share. We are very, very bullish on the power sector. We estimate that almost INR 46 lakh crores will be required over the next 4 or 5 years towards the entire power sector. For example, we are looking at the renewable energy capacity going up to 500 gigawatts, where we are anticipating a market business of roughly INR 21 lakh crores. We are looking at additional thermal capacity of 80 gigawatts, looking at roughly INR 5 lakh crores. We are looking at additional hydro capacity of 21 gigawatts, which is around INR 1.16 lakh crores. We are looking at new nuclear capabilities of almost 22 gigawatts, roughly INR 2 lakh crores, new pump storage projects with a capacity of 50 gigawatts with an approximate market potential of INR 1.85 lakh crores. Battery storage plants of roughly 74 gigawatts, which is expected to touch around INR 1 lakh crores and corresponding investments in the transmission and distribution, which should roughly aggregate around INR 13 lakh crores. So even assuming -- as we very fondly say that out of every 4 bulbs glowing in India, one is financed by REC, which is an indicator of a roughly 20% to 25% market share. Even if we maintain it, we are looking at roughly INR 10 lakh crores over the next 5 years. With our current loan book of around INR 6 lakh crores, we feel very confident that we should be able to touch INR 10 lakh crores by 2030. As you know, we are anticipating a huge power demand from data centers. We are anticipating that tariff reforms will keep on happening. We are very confident that payment security mechanisms to ensure that DISCOMs are able to pay power generators on time will only strengthen over the years to come. The clean energy integration is going to improve further. The battery storage systems, the pumped hydro, all of these are going to increase exponentially over the next few years. And these will further reinforce our clean energy integration with the -- and the compliance to the net zero achievement goal of 2070. We are very, very happy that we are partners with Government of India, Ministry of Power, and we are the national implementing agency for 2 very, very prestigious schemes, the Revamped Distribution Sector Scheme and the rooftop solar scheme, the PM-Surya Ghar: Muft Bijli Yojana. In PM-Surya Ghar: Muft Bijli Yojana, we are the single implementing agency for the entire -- for the very ambitious program. And this ambitious program seeks to target 1 crore households by 2028. And we are very, very happy that so far, we have touched roughly 17 lakh households have been covered under the rooftop solar scheme. And if you look at the progress in the last 6 months, that alone accounts for almost 7 lakh households being added to this. So our progress has been very encouraging in the rooftop solar scheme. Similarly, in the Revamped Distribution Sector Scheme, where we handle 19 states and UTs, we are very happy with the progress of our states. And we are very confident that with the power regulators coming on board, with the state governments paying their subsidies and showing their commitment and renewing their political will from time to time, we are very, very confident that India's power sector is not just growing, it's transforming. At REC, we are proud to be financing this evolution. We realize that we are not just financing projects, we are enabling national priorities. Our portfolio, which spans generation, transmission, renewables, distribution, aligned itself with energy transition and smart grid initiatives, we are very confident that we will continue to play a significant role in the government's overall objectives. I would also like to mention that our foray into infrastructure will keep on continuing. We are actively looking at new avenues of growth. Very recently, we have -- even as we speak today, we'll be signing an MOU with the Ministry of Shipping for investment in the maritime sector of our country, shipping and maritime sector of our country. Similarly, the metros, the ports, the road transport schemes and the road transport projects, any good infrastructure project, which has steady revenue streams is going to be our priority, and we are working very hard with the state governments and with the private sector partners to ensure that are [Audio Gap ] going from strength to strength. As I conclude, I extend my heartfelt gratitude to the Honorable Minister of Power, the Honorable Minister of New and Renewable Energy, the Honorable Minister of State for Power and New & Renewable Energy, the Secretary of Power and all esteemed officials of the Ministry of Power for their steadfast support and visionary guidance. Last but not the least, I would like to thank my colleagues on the Board and the wonderful employees of REC, who are working very, very hard to ensure that REC [ Audio Gap ] expectations and we achieved all our commitments. Thank you so much. Over to you.

We can now open the floor for the Q&A, please.

[Operator Instructions] The first question is from the line of Abhijit from MOFSL.

Sir, I just wanted to ask you two questions. One is in this Kaleshwaram project, right? very clearly, it's a good thing that we have received, given that it was a Stage-II asset, but when we guided for the 12% growth in FY '26 loan growth, 12% in FY '26, what this factored in? And now that tax rate for second half is much higher, are we confident that we will be able to deliver on the guidance? Or is there a certain reason to believe that the growth will actually be lower than what we had guided in the beginning of the year?

Yes. So you said you will be asking 2 points. I'm assuming that's only one.

Yes, so I can maybe complete the second question as well. The other thing I wanted to understand is, I mean, on and off, we keep hearing that both Hiranmaye Power as well as Sinnar Thermal are in advanced stages of resolution. So is the case that any of these 2 could get resolved in the current quarter. So basically, what I'm trying to understand is if you can briefly share what is the status of resolution in some of the stressed assets for us? These two questions.

Okay. So [ Audio Gap ] first, yes, we are very happy that almost INR 11,000 crores from Kaleshwaram has come back to us, reducing our stressed assets in the Stage-II category by almost INR 16,000 crores, which is a reduction of roughly 52% in our stressed assets, Stage-II stressed assets. And to your second part, whether we are still confident of achieving a growth rate of 11% to 12%. Absolutely. We have already done INR 1.15 lakh crores. That is with a prepayment of almost INR 12,000 crores from Kaleshwaram. So this growth that you see is with the prepayment. And we honestly don't foresee too many prepayments coming in the remaining 2 quarters. And if we continue to maintain our disbursements, and we are fairly confident of that. I don't see any reason why we should not touch 11% to 12% by the end of this financial year. With regard to the second question on Sinnar project, I will request my Director of Finance, to just update you on the Sinnar project.

As you know that we are in the process of becoming a net zero company by the year -- financial year '26. So we expect that these main assets, that is Sinnar and Hiranmaye, these will be resolved by the year -- by Q4. These are at the advanced stage of resolution. Hiranmaye, the final hearing -- outcome of the final hearing is to come in this quarter, Q3 only. And -- sorry, the Sinnar. And this Hiranmaye is now with the Supreme Court, some judgment is to come from the Supreme Court, and that will take place and we are confident that all assets -- around 11 or 12 assets are there, that all will be resolved in the financial year '26.

Got it. And sir, just one follow-up question. Sir, you said that you do not foresee too many repayments coming in 2H, in the second half. What makes us think that because first half that you'll acknowledge prepayments were particularly elevated. The reason you shared in your opening remarks that they have prepaid almost INR 49,000 crores in 1H, including the INR 11,000 crores from Kaleshwaram and predominantly out of their own internal accruals. So don't you think, I mean, this trend of higher prepayments could sustain in the coming quarters as well?

You will appreciate that out of the INR 49,000 crores, the major have come from the Kaleshwaram that is around INR 12,000 crores and then INR 10,000 crores has come from the RBPF scheme of Andhra Pradesh and Telangana. What they have done, they are availed long-term loan from us, and they have prepaid this extraordinary amount to REC. So this 28,000 -- this is 12,000 plus 10,000. It's around INR 22,000 crores have received on these accounts. These are the onetime scenario. And the rest is the Adanis, they have made a prepayment of around INR 3,000 crores, that is again since their headroom was not there for further sanctions. They have submitted some of the new schemes to us, and that is why they have prepaid us. Rest all is around INR 25,000 crores have come from the RBPF schemes, not INR 25,000 crores, though it is INR 20,000 crores, which has come from the RBPF scheme, where the scheme in itself says that anyone DISCOMs having the surplus cash available, will make prepayment to us, thereafter, they can avail the fund as and when required with them and that activities will keep on going on. So other than RBPF and the balance payment of the Kaleshwaram, we don't expect much of the prepayment coming up in the next 2, 3 or 4 -- quarter 3 and quarter 4.

I'd just like to supplement this figure. We must -- I must -- you must realize that we have a committed order book of nearly INR 2.5 lakh crores. And if we look at previous year pending sanctions also, which have yet to translate into actual kitty, which we are looking at for disbursement is much more than that. So we are very confident that, yes, our prepayments will be controlled. We don't anticipate any major prepayments apart from the ones which DS has just mentioned. So even after factoring those prepayments, we are fairly confident that we should be able to achieve a growth of over 12% - 11% to 12%, 11% to 12%.

The next question is from the line of Kushagra Goel from CLSA.

So first is on the -- there was a draft regulation.

Your volume is very low. Could you -- the volume is very low.

Yes. Sure. So I will just repeat. The first question is that there was a draft amendment by RBI in which they were proposing to lower capital requirements for lending to high-quality infra projects. So just wanted to know your thoughts on this. How can this benefit us or can this lead to higher competition? So that was one. Second is on your margins. So I just wanted to understand that as REC shares will increase in our books, can that lead to lower margins for us? How should we broadly think about that? Those are my two questions.

First of all, as far as the RBI guidelines have come, these are at the draft stage, and these guidelines are good for us. We are also submitting our comments to the RBI. And we have seen in the past also that whenever the final guidelines issued, that are really issued with the much refined -- and if you see that these guidelines are basically have come as a replacement of earlier PPP guidelines, which were in place. So these are the guidelines in the much better shift, and we expect that the feedbacks from the many of the institutions that -- in that case that we can expect that these guidelines would be much -- in a much better shape. And as we got your second question was regarding the renewable portion. Yes, we expect that renewal portion will increase. But similarly, we are expecting that the share of distribution and the generation will also keep on increasing. If you see that as of now, my renewable share is around 12% out of the loan book of INR 582,000 crores. So for example, if it touches around INR 10 lakh crores and my renewable share gets increased to 25%. That is not going to affect since by that time, my net worth would be around as of now, it is around INR 82,000 crore, which will may touch around INR 140,000 crores. So we will be able to maintain our NIM between 3.5% to 3.75% and a spread between 2.75% to 3%. Since whatever the benefits to pass on due to the competition in the renewable sector that some of them may come from the growth of the -- growth of net worth as well as the new business, which is higher yielding business that is coming from the generation and the distribution sector.

The next question is from Kunal Shah from Citigroup.

Yes. So the question was particularly on margins for this quarter and say, in terms of the overall cost of funds. So the borrowings have remained at or it has come off marginally on a quarter-on-quarter basis, but still the finance cost is up quite a bit. . So not able to get in terms of the increase in the cost of funds during the quarter, wherein we would have seen some benefit of repricing of the liabilities. So if you can just highlight that, yes.

As far as my borrowing cost is concerned, that has increased a little bit, so that all because of some of the risk mitigation measures, which we have taken in respect of the foreign borrowings because of the volatility, we had to take some of the measures that has added to the cost. Further, as regards my borrowing cost, almost 80% to 85% is of the fixed cost nature. So generally, out of that, only 20% redeemed in a year and all the loan gets redeemed in the next -- over a few period of 5 years. So that affects in the years to come, not immediately affects my borrowing. So because of this the extra measures, which we have taken and the fixed nature of my borrowing, this has just increased from 7.12% to 7.17%.

So for the quarter, it would still have been higher, it would have been like say, 10, 12 basis points increase. This is for the first half, which you are indicating. And in terms of the -- so this was largely maybe on this INR 155,000 odd crores of foreign currency borrowings, was there some risk, maybe some cost which was incurred on the hedging and now when we look at it in terms of the overall hedge out of this INR 155,000 crores, how much is hedged and how much is unhedged?

As far as my hedging for this -- foreign borrowing portfolio is concerned, almost 99% is hedged, which is as per the RBI guidelines.

So maybe what was the cost incurred towards what you mentioned like maybe in terms of optimizing the foreign currency borrowing, which led to increase in the cost. So what was that cost related to?

I can say that in terms of paisa, it is around INR 0.08 to INR 0.10, which has added to my cost of borrowing.

No, I was just checking in terms of the nature, yes?

That's all because of the increase in the protection level, which we have taken. We have taken a [ frugal ] based of hedging. So in that case, we have increased the ETI level so as to give us the more protection against any of the volatility, which is happening in the financial market.

Perfect. And secondly, if you can quantify based on -- obviously, you are expecting a lot of resolutions coming through in the second half towards on the NCLT cases, even though the quantum is still like INR 6,000-odd crores. But eventually, when we look at it, what could be the repayment run rate, which we can expect over next couple of quarters and for the second half?

The repayment or the prepayments, you're asking about? The repayments?

Prepayment, yes, both together in terms of the expectations?

Actually, every month, we have a repayment of INR 8,000 crores to INR 9,000 crores, that is a regular repayment. And other than this, we have the prepayments on account of the RBPF, which I have just mentioned the characteristic of the itself permits that the borrowers can always make a prepayment, whenever the cash surplus is available with them. And thereafter, they again seek further funding from us whenever they need the fund. So that will continue to happen in our portfolio. But for the rest of the things, we are not expecting much of the prepayment, except what we have just said in the beginning of our conference that is coming from the rest of the amount from Kaleshwaram that is around to the tune of INR 5,000 crores. And I don't think that other than that, that is anticipated.

Maybe another INR 5,000 crores more.

Another INR 5,000 crores more per quarter may come.

The next question is from the line of Shreepal Doshi from Equirus.

Sir, firstly, just wanted to have some clarity on this Kaleshwaram project total exposure and with respect to incremental prepayments, all of it will be received in 3Q itself or that can get, let's say, split into 2, 3 quarters sort of a time period?

Kaleshwaram total outstanding was around INR 17,000 crores, of which INR 11,800 crores have already been received. Rest since it's Stage-II assets, and we have always focused on the quality of the assets, so that is why we have recurred this much amount from the Kaleshwaram and that has gone into some kind of litigations also. So it is good in the interest of the company that we get the prepaid for that. So that is why we decided to accept the payment for the Kaleshwaram loan. And we expect that the rest of the amount will come in Q3 and the Q4, but it is good for the company that the Stage-II asset gets lowered.

Got it. And sir, how much of it -- like from the provisioning point of view, this quarter, we would have benefited because Stage II and we were carrying higher provisions. So how much of the provision got reversed or released because of this prepayment during the quarter?

That was not much of the amount, in fact the project was secured against the government guarantee. So it was not a very significant amount, which got reversed because of this prepayment.

Sir, the second question was pointing to the cost of fund. So the India's sovereign rating has also improved in the last 6 months sort of a time period. So have you seen any benefit to us for our foreign borrowing clients? And secondly, you said that 99% of our foreign borrowing is hedged, but to what level of rupee against the dollar, is it hedged? So let's say, if rupee goes to INR 90, INR 91, what is the kind of implication that we can have in the P&L? So these were the 2 questions pertaining to the borrowing, sir.

So first, you have said about cost of borrowing.

Yes. Because India's sovereign rating has improved, so any benefit that we are seeing any fears and how much are we seeing in terms of our foreign borrowing clients?

For example, in case we go for the international borrowing or if we go for the raising funds through the bond, then that may give us little benefit. Otherwise, we are already at the highest level of the sovereign rating. So that is not going to give us any significant benefit out of it. And the second question was regarding hedging limits, yes, for the different kind of loans, we have a different limits. And as of now, against the dollar, we are hedged well within the limit.

So is it fair to assume that up to, let's say, INR 89, INR 90, we would be better. And if it reaches that level, there could be implications in the P&L?

Up to INR 90, there should not be any issues. .

We are hedged much beyond that. We are hedged much beyond 100.

That would be for the fresh borrowing that we would have done in the last 3 months sort of a time period. Is it fair to assume that way?

So the fresh borrowing, which we have taken, that is for -- if it is for 1 year, then that is coming at around INR 95 or INR 96, and if it is for 5 years, that is much beyond INR 100. So that has no a question. The ECBs which is maturing in Q3 and Q4, as I was talking about that. So as far as against dollar is concerned, as on date, there is no question, let's see, and we are always -- we are a proactive treasury management system. So we always take advance action in case if any problems, we anticipate that is going to come.

[Operator Instructions] The next question is from the line of Chintan Shah from ICICI Securities.

And so firstly again on the growth front, so basically, in terms of competition, given that we have a 20%, 25% market share and potent market size is quite huge. But after the repo rate cut, so are we seeing the competition increasing particularly from PSU banks or from government institutions like NAFED or any other type of institution and that could potentially lead to some pressure on the yields going ahead, and have you revised in card rates in the last 6 months or so? Yes, that's the first question.

We had reduced card rate in the month of May. And somewhere you will have to understand that we are also in the business. And what is evident that our disbursement has grown substantially during the last Q1 and Q2, so that is an evidence that we are very much proactive in the market, and we are very much competitive in the market. So for that -- on that front, you need not to worry and we expect that the competition will come as far as the renewable sector is concerned from market. And there, our rates are the lowest in the market. And as far as the other sectors are concerned, REC and the PFC majorly will lead, and we already have the share of around 20% to 25%. We'll continue to maintain that share, 20% to 25% share in REC and PFC each.

That is helpful. And sir, just one thing again on the borrowing cost front. So say, for example, if there is a 3%, 4% depreciation in the USD/INR in a particular quarter or so, then potentially will that result in some rise in our hedging costs again, so like from INR 90 to INR 93, if it goes in the next 2, 3 quarters or so. So that would again lead to some rise in our hedging costs. Is that a fair assumption?

Actually, in that case, suppose if we have taken funds in the past, we don't have a protection level up to INR 90. There may be a protection level of INR 92, INR 93 and INR 95 also. So ultimately, as each transaction maturing on the day we have to decide what kind of actions we have to take. So our action starts on 1 month prior to that. So we see the trend and on that basis, we used to decide whether we have to increase our ETI limit or not increase our ETI limit. So that all depends on merit.

Sure, sir. But just if there is some random movement of 3%, 4% in a particular month or so, yes, then that could lead to some rise in the hedging costs. So that is right, yes.