Shares of Power Finance Corporation (PFC) and REC Limited surged in trade on Monday after global brokerage firm CLSA upgraded both stocks to “high conviction outperform,” citing strong asset quality and stable performance in the power financing sector. The upgrade has boosted investor confidence, driving both stocks higher.
As of 1:30 PM – PFC shares gained over 4% to ₹378.90, up ₹14.60 from the previous close of ₹364.30. The stock has been trading in a range of ₹363.50 to ₹380.65 during the day, with a market capitalization of ₹1.25 trillion. The company’s price-to-earnings (P/E) ratio stands at 5.61, while the dividend yield is 3.37%.
REC Limited shares also witnessed a rise of over 4%, trading at ₹375.35, up ₹15.05 from its previous close of ₹360.30. The stock’s day range has been ₹360.10 to ₹377.50, with a market capitalization of ₹987.83 billion. REC has a P/E ratio of 6.31 and a dividend yield of 4.48%.
CLSA remains optimistic about PFC and REC, highlighting their robust performance in financing gencos, renewable energy projects, and infrastructure over the past two years. The brokerage firm noted that no major slippages have been observed, apart from concerns related to state-owned power distribution companies (discoms). CLSA expects the provision coverage ratio (PCR) for discoms to rise in Q4 FY25, ensuring stability despite associated risks.
Additionally, CLSA projects a write-back of ₹22-25 billion from pending bad assets, including the KSK Mahanadi resolution, which could positively impact future earnings. Investors remain focused on these developments as the stocks continue to gain momentum in today’s session.
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