CLSA has reiterated its high-conviction ‘Outperform’ rating on REC with a target price of ₹525, despite a change in leadership at the company. The Ministry of Power has assigned the additional charge of REC’s Chairman and Managing Director (CMD) to Parminder Chopra, who currently serves as CMD of parent company Power Finance Corporation (PFC), which holds a 52.63% stake in REC.
Historically, top-level appointments at REC have often involved external candidates who serve for a few years before transitioning to significant roles in the government. CLSA believes that while this change may pose operational adjustments in the short term, it should not impact the stock’s fundamentals or financial performance trajectory.
The brokerage continues to see strong growth visibility for REC given its loan growth, asset quality, and returns profile. It remains a top pick in the public sector financial space for CLSA.
