REC Ltd
REC Ltd
Financial Services F&OKey Fundamentals
MidcapFinancial InstitutionFinancial ServicesInsights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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39 extracted metrics + investor summaries across FY14–FY26.
Tapetide Score
Data-driven rating, 0–100. How it works →
Technical Indicators
Key Insights
Strengths
3- Stock is trading at 1.08 times its book value
- Stock is providing a good dividend yield of 5.36%.
- 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 10h agoREC Ltd is a government-owned infrastructure finance company with a loan book of ₹5.67 lakh crore (FY25), trading at a P/E of 5.7x and P/B of 1.08x. FY25 profit after tax grew 12% to ₹15,713 crore, though recent TTM profit growth has turned negative at -5%, and sales growth has moderated to 2% TTM after a 15% three-year CAGR.
- Deeply discounted valuation at P/E of 5.7x versus long-term profit compounding of 14% over 5 years, suggesting the market is pricing in significant pessimism
- Loan book grew 11% YoY to ₹5.67 lakh crore in FY25 with a stated target of ₹10 lakh crore by 2030, implying ~12% annual growth runway
- Asset quality has improved sharply — gross NPA at 1.05-1.06% and net NPA at 0.24% with no new NPAs added for over 10 consecutive quarters
- Dividend yield of 5.36% supported by a consistent payout ratio of 29.9%, providing tangible return to shareholders
- Renewable energy loan book grew 30% YoY to ₹75,347 crore in FY26, diversifying away from conventional thermal power lending
- Trading at just 1.08x book value despite sustained ROE of 20-21% over the last 3, 5, and 10 years — a significant discount for a profitable lender
- FY25 total income rose 19% to ₹55,980 crore and net interest margin stood at 3.64% for 9M FY25, reflecting healthy spreads
- Government-owned status provides implicit sovereign backing, enabling low-cost borrowing and AAA-rated bond issuances
- TTM sales growth has decelerated sharply to just 2%, down from 15% three-year CAGR, signalling potential loan demand slowdown
- TTM profit declined 5%, and Q4 FY26 net profit fell 22% YoY to ₹3,375 crore amid reduced interest income
- Low interest coverage ratio indicates vulnerability to funding cost spikes — as a wholesale borrower, margin compression risk is elevated
- Five-year sales CAGR of only 10.9% is modest for a lender in a high-growth infrastructure economy, reflecting structural concentration risk
- Stock has delivered -11% return over the past 1 year, underperforming broader markets despite strong fundamentals, indicating negative sentiment
- Potential capitalisation of interest costs could overstate reported asset quality and profitability metrics
- Heavily concentrated in power sector lending — any policy shift, discom stress, or regulatory change could impair a large portion of the book
- Loan book growth moderated to 7% YoY by Q2 FY26 (₹5.82 lakh crore), falling below the 12% annual target needed to reach ₹10 lakh crore by 2030
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 4h ago- Loan growth slows, target cut Aug 10
CLSA cut target price to ₹420 after Q1 loan growth slowed to just 1% YoY due to RBPF run-down, core margin moderation, and sharp FX loss from rupee depreciation. FY27 PAT estimate trimmed by 2%-3%.
- Q1 profit and revenue decline Jul 24
Q1 net profit fell to ₹41.49B from ₹44.5B YoY and revenue declined to ₹139B from ₹142B, reflecting contraction on both key financial metrics.
- Board composition fine ₹5.31L Jul 14
REC fined ₹5.31 lakh by exchanges for non-compliance with board composition norms in Q4FY26 due to delays in government appointment process.
- Renewable book up 30% YoY Jul 30
BRSR FY2025-26 shows renewable loan book grew 30% YoY to ₹75,347 crore, with 76% reduction in Scope 2 emissions and zero data breaches.
- ₹4.25 interim dividend declared Jul 25
REC declared ₹4.25 per share interim dividend for FY27 alongside Q4FY26 consolidated net profit of ₹4,192.76 crore.
- New Executive Director appointed Aug 4
Somya Kant promoted to Executive Director effective August 3, 2026, bringing over 35 years of finance and accounts experience to strengthen senior management.
- ₹20.42Cr block trade on NSE Aug 7
Institutional block trade of ~556,728 shares at ₹366.85 per share worth ₹20.42 crore executed outside open market on NSE.
- SPV divestments to Tata, PGCIL Jul 30
REC sold Ryapte Power Transmission to Tata Power for ₹10.86 crore and two other SPVs to Power Grid Corp and Terralight Solar for combined ₹33.26 crore.
- Three new transmission subsidiaries Jul 30
REC incorporated Kukshi Alirajpur, Beed Parli, and Kesurdi Power Transmission subsidiaries for intra-state projects in Madhya Pradesh and Maharashtra.
- New Internal Auditor appointed Aug 1
Mukul Agarwal appointed Internal Auditor effective August 1, 2026, succeeding Sahab Narain who retired on superannuation.
- 57th AGM on Aug 25 Jul 28
REC to hold 57th AGM via video conferencing on August 25, 2026, with shareholders urged to update bank details for electronic dividends.
- Independent Director appointed Jul 20
Poonam Chauhan appointed as Non-Official Independent Director for three years effective July 20, 2026 per Ministry of Power order.
TL;DR: REC faces near-term earnings pressure with Q1 loan growth slowing to 1% YoY, declining profit, and FX headwinds prompting CLSA to trim estimates. On the positive side, the renewable loan book is growing strongly at 30% YoY and shareholder returns remain healthy with a ₹4.25 dividend. Asset quality is benign and ESG credentials are improving, but the trend is deteriorating on core growth metrics and margins until RBPF run-down stabilizes and new disbursements pick up.
Quarterly Results
| 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
| 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
| 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
| 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
| 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% |
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]