Bernstein has reiterated its Outperform rating on REC Limited, setting a target price of ₹653, which suggests a potential upside of approximately 25% from the current market price of ₹523.90. Key highlights of the report include:
- Improvement in Asset Quality and Returns: Bernstein noted that REC’s asset quality, net interest margin (NIM), and returns have shown improvement, indicating a stable financial position.
- Strong Loan Growth: Loan growth remains broadly on track, reinforcing REC’s position in the market.
- Increased Bids for Stressed Assets: Bids for KSK Mahanadi plants, REC’s largest stressed asset, have increased further, suggesting recovery prospects.
- Positive Q2 Results: REC posted good results, with continued provision reversals and an increase in spreads, bolstering profitability.
- Power Sector Investment: Bernstein continues to see REC favorably as a lender poised to benefit from investments in India’s power sector cycle.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should perform their due diligence before making investment decisions.
