ICICI Securities initiates ‘Buy’ call on PFC and REC; sees robust growth potential in power financing

ICICI Securities has initiated ‘Buy’ ratings on Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) with target prices of ₹550 and ₹600, respectively.

ICICI Securities has initiated ‘Buy’ ratings on Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) with target prices of ₹550 and ₹600, respectively. The brokerage highlights significant growth opportunities in the power financing sector driven by a robust ₹43 lakh crore pipeline for power generation and transmission projects.

Both PFC and REC are key players in India’s power financing sector, holding 20% market share each. The energy transition and funding requirements for renewable energy projects have emerged as critical growth catalysts for these firms. ICICI Securities also notes the companies’ strong asset quality and balance sheets, which position them to capitalize on opportunities arising from government initiatives aimed at improving the health of discoms.

Advertisement

PFC is a leading financial institution dedicated to funding power sector projects in India. Established in 1986, it focuses on financing power generation, transmission, and distribution projects, particularly in renewable energy. Similarly, REC, established in 1969, provides loans to state electricity boards, rural electric cooperatives, and private sector power developers, playing a vital role in the development of India’s rural electrification initiatives.

The brokerage emphasizes that both companies are poised to benefit from India’s growing energy demands and initiatives to transition toward cleaner energy sources. Their operational and financial stability, supported by various government policies, make them attractive picks for investors seeking exposure to India’s power financing sector.