Shares of REC Ltd remain in focus after strong Q1 results, with multiple global brokerages maintaining positive outlooks on the stock despite minor concerns.
UBS has retained a Buy rating, though it trimmed the target price to ₹550 from an earlier estimate. The brokerage highlighted that the PAT beat was driven by write-backs, while AUM grew 10.4% YoY and disbursements rose 36.3% YoY. UBS noted that the resolution of one NPA supported overall performance, and praised the strong return ratios with RoA at 2.9% and RoE at 23%.
CLSA reiterated its High Conviction Outperform rating and kept the target at ₹525. It noted that the Q1FY26 PAT beat estimates by 4%, driven by the TRN Energy resolution and provision reversals. However, the firm flagged that loan growth at 10% came in below guidance, and a loss on fair value dragged other income. CLSA awaits management commentary on this aspect.
Morgan Stanley also retained its Overweight stance and set a target price of ₹485. It observed a 29% YoY and 5% QoQ PAT growth, with a strong beat driven by provision reversals and NII outperformance. The NIM at 3.9% beat estimates but saw a slight sequential dip due to interest write-backs. Disbursements surged 36% YoY, led by the distribution segment.
Overall, the trio of global brokerages — UBS, CLSA, and Morgan Stanley — maintain their buy or overweight ratings on REC, citing robust earnings, improving asset quality, and healthy disbursement trends, though some valuation recalibrations and growth guidance monitoring remain.
Disclaimer: The views and recommendations expressed in this article are those of the respective brokerages. They do not represent the views of this publication. Investors are advised to consult their financial advisor before making any investment decisions.
