Shares of REC Limited (NSE: RECLTD) rose 2.26% to ₹411.30 on March 6, 2025, after Macquarie reaffirmed its ‘Outperform’ rating on Power Finance Corporation (PFC) and REC, stating that the recent weakness in PSU stocks is unjustified and the long-term growth story for power financiers remains strong.
Macquarie’s Key Insights on REC and PFC
- Concerns about an earnings slowdown are exaggerated, and the recent decline in PSU financial stocks is mainly due to weaker market sentiment.
- Loan growth concerns are overblown, as competition and lower power demand fears are not reflective of the sector’s actual fundamentals.
- REC’s target price is set at ₹700, reinforcing its strong growth potential.
- Structural growth remains intact, with REC benefiting from:
- Lower credit risk due to a strong loan portfolio quality.
- Healthy Return on Equity (ROE), supporting double-digit earnings growth.
- Attractive valuations, as PSU financials trade at a discount despite strong business fundamentals.
Stock Performance Summary
- Current Price: ₹411.30 (+2.26%)
- Previous Close: ₹402.20
- Day Range: ₹408.05 – ₹416.65
- 52-Week Range: ₹357.35 – ₹654.00
- Market Cap: ₹1.08 trillion
- P/E Ratio: 6.93
- Dividend Yield: 4.08%
- Average Volume: 9.20 million
Investor Outlook
Macquarie’s reaffirmation has boosted investor sentiment, with REC seen as one of the best plays in the power finance sector due to its low-risk profile, high ROE, and undervalued stock price.
Disclaimer:
The information provided is for informational purposes only and should not be considered as financial or investment advice. Stock market investments are subject to risks, and readers are advised to conduct their own research or consult a financial advisor before making investment decisions. The author or Business Upturn is not liable for any losses arising from the use of this information.
