REC
REC
Financial Services F&OKey Fundamentals
MidcapFinancial InstitutionFinancial ServicesTapetide Score
Data-driven rating, 0–100. How it works →
Key Insights
Strengths
3- Stock is trading at 0.97 times its book value
- Stock is providing a good dividend yield of 5.93%.
- Company has been maintaining a healthy dividend payout of 29.9%
Weaknesses
3- Company has low interest coverage ratio.
- The company has delivered a poor sales growth of 10.9% over past five years.
- Company might be capitalizing the interest cost
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 2d agoREC Ltd, a Government of India enterprise focused on power sector financing, trades at a market cap of ₹82,209 Cr with a PE of 5.2x and a PB of 0.98x — below book value. The company has delivered a consistent ROE of ~20-21% over the past decade but faces headwinds with TTM sales growth slowing to 2% and TTM profit declining by 5%.
- Trading below book value at 0.98x PB, suggesting the stock is priced below the net asset value of the company
- Attractive dividend yield of 5.91% with a consistent payout ratio of 29.9%, offering meaningful income to shareholders
- Low PE of 5.2x relative to broader market multiples, indicating compressed earnings valuation
- Consistent ROE of 20-21% maintained over 3, 5, and 10-year periods, reflecting disciplined capital allocation for an NBFC
- Compounded profit growth of 14% over both 3-year and 5-year periods demonstrates sustained earnings expansion
- 10-year stock CAGR of 14% and 5-year CAGR of 22% indicate meaningful long-term wealth creation despite recent weakness
- Compounded sales growth of 15% over 3 years shows the loan book expanded at a healthy pace in the medium term
- As a government-backed infrastructure financing institution, REC benefits from India's ongoing push for power sector capex and renewable energy investment
- TTM sales growth has decelerated sharply to just 2%, down from 15% three-year CAGR, signaling a potential slowdown in loan book growth
- TTM profit growth has turned negative at -5%, indicating margin pressure or rising provisioning in the most recent period
- Low interest coverage ratio raises concerns about the company's ability to comfortably service its own borrowings
- Possibility of interest cost capitalisation could mean reported profits overstate true economic earnings
- 1-year stock CAGR of -16% reflects significant recent underperformance and negative market sentiment
- 5-year compounded sales growth of only 10.9% is modest for a power sector financier operating in a high-growth infrastructure environment
- As a wholesale lending NBFC concentrated in the power sector, REC carries significant sectoral concentration risk tied to the financial health of state discoms and power utilities
- High leverage inherent to the NBFC model combined with the low interest coverage ratio amplifies balance sheet risk during credit stress cycles
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 2h ago- Board non-compliance penalty Aug 26
NSE and BSE each fined REC Ltd ₹10,77,340 (total ₹21.5 lakh) for failing to maintain required board composition during Q1 FY27 (quarter ended June 30, 2026). Company cited government appointment protocol delays.
- India's first tokenized bond issue Sep 7
REC issued ₹500 crore of tokenized corporate bonds under SEBI's sandbox framework, oversubscribed 8x. The pilot enables same-day settlement via distributed ledger technology.
- LIC crosses 5% stake Sep 8
LIC acquired 9.93 lakh shares on Sep 7, pushing its total holding to 13.25 crore shares (5.03% of voting capital). Crossing the 5% threshold signals institutional confidence.
- New subsidiaries for transmission bids Aug 26
REC incorporated two new subsidiaries to participate in power transmission project bids, expanding its footprint in India's power infrastructure segment.
- New Executive Director appointed Sep 10
REC appointed IAS officer Isha Duhan (UP cadre) as Executive Director effective Sep 10, 2026, per SEBI LODR regulations.
- 57th AGM approves FY26 accounts Aug 25
Shareholders approved FY26 financial statements and appointed new directors including independent members at the 57th AGM on Aug 25, 2026.
TL;DR: REC Ltd is showing innovation leadership with India's first tokenized bond issue (8x oversubscribed) and strategic expansion into power transmission via new subsidiaries. LIC building its stake past 5% adds institutional backing. The board composition penalty is a minor governance blemish but reflects procedural delays rather than structural issues. Overall trend is constructive, with infrastructure expansion and capital market innovation positioning REC well heading into H2 FY27.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 11,104 | 11,688 | 12,052 | 12,677 | 13,079 | 13,682 | 14,272 | 15,334 | 14,737 | 15,153 | 15,051 | 14,564 | 14,435 |
| Expenses | 332 | -492 | 240 | -425 | 717 | 97 | 263 | 1,084 | 217 | 476 | 655 | 1,231 | 447 |
| Financing Profit | 3,723 | 4,831 | 4,158 | 5,206 | 4,341 | 5,079 | 5,172 | 5,482 | 5,587 | 5,546 | 5,154 | 4,402 | 5,241 |
| Fin. Margin % | 34% | 41% | 34% | 41% | 33% | 37% | 36% | 36% | 38% | 37% | 34% | 30% | 36% |
| Other Income | 4 | 13 | 20 | 29 | 14 | 24 | 15 | 15 | 87 | 10 | -11 | 20 | 35 |
| Interest | 7,049 | 7,350 | 7,654 | 7,896 | 8,020 | 8,506 | 8,837 | 8,768 | 8,934 | 9,131 | 9,243 | 8,931 | 8,748 |
| Depreciation | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 7 | 7 | 7 | 7 | 7 |
| PBT | 3,721 | 4,838 | 4,172 | 5,229 | 4,349 | 5,097 | 5,181 | 5,490 | 5,666 | 5,549 | 5,136 | 4,415 | 5,268 |
| Tax % | 20% | 22% | 21% | 22% | 20% | 21% | 21% | 21% | 21% | 20% | 21% | 24% | 20% |
| Net Profit | 2,968 | 3,790 | 3,308 | 4,079 | 3,460 | 4,038 | 4,076 | 4,310 | 4,466 | 4,415 | 4,052 | 3,375 | 4,193 |
| EPS in Rs | 11.27 | 14.39 | 12.56 | 15.49 | 13.14 | 15.33 | 15.48 | 16.37 | 16.96 | 16.77 | 15.39 | 12.82 | 15.92 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 20,544 | 24,125 | 24,338 | 22,658 | 25,408 | 29,942 | 35,557 | 39,276 | 39,486 | 47,517 | 56,369 | 59,586 | 59,202 |
| Expenses | 1,149 | 1,680 | 1,888 | 3,379 | 1,702 | 3,981 | 3,292 | 4,838 | 1,858 | -366 | 2,153 | 2,568 | 2,809 |
| Financing Profit | 7,555 | 8,162 | 8,988 | 5,946 | 8,066 | 6,969 | 10,776 | 12,387 | 13,894 | 17,936 | 20,084 | 20,780 | 20,342 |
| Fin. Margin % | 37% | 34% | 37% | 26% | 32% | 23% | 30% | 32% | 35% | 38% | 36% | 35% | 34% |
| Other Income | 6 | 4 | 24 | 18 | 33 | 72 | 15 | 62 | 28 | 48 | 58 | 13 | 53 |
| Interest | 11,840 | 14,282 | 13,462 | 13,333 | 15,639 | 18,991 | 21,489 | 22,051 | 23,733 | 29,948 | 34,131 | 36,238 | 36,051 |
| Depreciation | 8 | 20 | 40 | 7 | 8 | 12 | 11 | 18 | 24 | 24 | 25 | 27 | 27 |
| PBT | 7,552 | 8,147 | 8,972 | 5,958 | 8,090 | 7,030 | 10,780 | 12,431 | 13,898 | 17,960 | 20,117 | 20,766 | 20,368 |
| Tax % | 29% | 30% | 30% | 25% | 29% | 29% | 22% | 19% | 20% | 21% | 21% | 21% | — |
| Net Profit | 5,344 | 5,691 | 6,313 | 4,451 | 5,741 | 4,972 | 8,378 | 10,036 | 11,167 | 14,145 | 15,884 | 16,308 | 16,035 |
| EPS in Rs | 20.3 | 21.61 | 23.98 | 16.9 | 21.8 | 18.88 | 31.82 | 38.11 | 42.41 | 53.72 | 60.32 | 61.93 | 60.9 |
| Div. Payout % | 20% | 30% | 30% | 41% | 38% | 44% | 30% | 30% | 30% | 30% | 30% | 30% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 987 | 987 | 1,975 | 1,975 | 1,975 | 1,975 | 1,975 | 1,975 | 2,633 | 2,633 | 2,633 | 2,633 |
| Reserves | 24,085 | 27,906 | 31,696 | 30,613 | 32,571 | 33,422 | 41,789 | 49,339 | 55,487 | 66,717 | 75,184 | 81,863 |
| Borrowing | 1,50,979 | 1,69,212 | 1,67,852 | 2,04,367 | 2,44,249 | 2,86,289 | 3,29,723 | 3,33,043 | 3,80,790 | 4,45,568 | 4,96,801 | 5,15,284 |
| Other Liabilities | 7,404 | 8,840 | 8,723 | 5,416 | 19,659 | 25,345 | 27,380 | 26,503 | 26,592 | 33,273 | 39,883 | 40,378 |
| Total Liabilities | 1,83,456 | 2,06,945 | 2,10,245 | 2,42,370 | 2,98,454 | 3,47,030 | 4,00,867 | 4,10,860 | 4,65,503 | 5,48,191 | 6,14,502 | 6,40,158 |
| Fixed Assets | 110 | 254 | 355 | 132 | 165 | 166 | 267 | 628 | 641 | 632 | 629 | 616 |
| CWIP | 10 | 78 | 166 | 129 | 199 | 288 | 336 | 6 | 3 | 24 | 76 | 128 |
| Investments | 1,596 | 2,352 | 2,617 | 2,948 | 2,463 | 2,386 | 1,981 | 2,190 | 3,170 | 5,352 | 6,674 | 9,831 |
| Other Assets | 1,81,740 | 2,04,261 | 2,07,108 | 2,39,162 | 2,95,627 | 3,44,190 | 3,98,282 | 4,08,035 | 4,61,689 | 5,42,184 | 6,07,123 | 6,29,583 |
| Total Assets | 1,83,456 | 2,06,945 | 2,10,245 | 2,42,370 | 2,98,454 | 3,47,030 | 4,00,867 | 4,10,860 | 4,65,503 | 5,48,191 | 6,14,502 | 6,40,158 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | -23,898 | -13,278 | 6,805 | -32,510 | -35,866 | -32,712 | -43,512 | -3,910 | -37,360 | -57,723 | -39,064 | 5,972 |
| Investing | 151 | -756 | -101 | 46 | 457 | 121 | 861 | -287 | -943 | -1,831 | -1,302 | -3,308 |
| Financing | 23,098 | 15,291 | -3,947 | 28,244 | 35,543 | 33,926 | 42,113 | 3,159 | 38,123 | 59,588 | 40,034 | -2,375 |
| Net Cash Flow | -649 | 1,257 | 2,757 | -4,220 | 134 | 1,336 | -538 | -1,038 | -180 | 34 | -333 | 289 |
| Free Cash Flow | -23,943 | -13,537 | 6,601 | -32,584 | -35,957 | -32,812 | -43,586 | -3,958 | -37,377 | -57,756 | -39,070 | 5,948 |
| CFO/OP | -111 | -48 | 42 | -157 | -143 | -119 | -126 | -2 | -92 | -114 | -64 | 17 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE % | 23% | 21% | 20% | 13% | 17% | 14% | 21% | 21% | 20% | 22% | 22% | 20% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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57 extracted metrics + investor summaries across FY11–FY26.
Documents
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Company Information
REC is a Central Public Sector Undertaking under the Ministry of Power involved in financing projects in the complete power sector value chain from generation to distribution. [1]
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