REC Ltd.
Banking · NSE
52-week range
₹304 – ₹407
From 52w high
-11.6%
RSI (14)
52.2
vs SMA 50 / 200
↑ 50 · ↑ 200
REC Limited (RECLTD) is a government-backed infrastructure finance company trading at 358, with a trailing PE of 5.8 and a dividend yield of 6.46% — the lowest PE valuation among its 6-stock sector peer group. The stock has declined 8.18% over 12 months against a backdrop of 5-year earnings contraction of 21.9%, while reporting a current-year profit margin of 70.6% and ROE of 19.96%. Structural leverage (D/E of 607.5) and limited free-cash-flow generation are defining characteristics of the business model.
- ✓Trailing PE of 5.8 and forward PE of 5.0 are the lowest among 6 sector peers, where comparable multiples range from 14.9 (Axis Bank) to 69.6 (HDFC Life).
- ✓ROE of 19.96% ranks first among the 6-stock peer group, exceeding 15% in 4 of the available persistence years and above Axis Bank (13.15%), HDFC Bank (13.82%), and Bajaj Finance (17.91%).
- ✓Dividend yield of 6.46% is materially above typical large-cap financial sector peers; the company recommended a final dividend for FY2025-26 in late April 2026.
- ✓Mean analyst rating of 1.62 across 13 analysts (1-5 scale, lower = more constructive).
- ✗5-year revenue growth of -14.4% and 5-year earnings growth of -21.9% indicate sustained medium-term contraction in the reported financial base.
- ✗Free cash flow was positive in only 1 of the available tracked years, with a rising debt trend; balance-sheet leverage (D/E of 607.5) amplifies sensitivity to interest-rate and credit-cycle shifts.
- ✗Quality score of 34 ranks 4th out of 6 sector peers, reflecting weak composite quality relative to the peer group despite the leading ROE position.
- ✗EPS fell short of expectations in the most recent quarterly result (Meyka, May 7 2026), compounding the 5-year earnings contraction trend.
- ·Q4 FY2026 results were described as strong by one source (AD HOC NEWS, May 9 2026) with a dividend hike and transmission expansion cited, while a separate source (Meyka, May 7 2026) flagged an EPS miss relative to expectations — the two narratives reflect different interpretations of the same reporting period.
- ·REC Limited announced the cessation of Executive Director Smt. Saraswathi effective May 1 2026, a senior management change that may draw attention to governance continuity at the leadership level.
- ·The stock is trading 11.98% below its 52-week high with RSI at 50.94 (neutral), sitting between near-term support levels (350.44 to 343.54) and resistance levels (363.08 to 378.18).
- ?How much of the reported ROE is attributable to financial leverage (D/E of 607.5) versus underlying asset returns, and how does that compare to private-sector NBFC peers?
- ?Given that FCF was positive in only 1 of the available tracked years, how does the company fund dividend payments and loan-book growth — through bond issuances, government support, or other mechanisms?
- ?Does the 5-year earnings contraction of 21.9% reflect a structural shift in infrastructure lending economics, or a base-effect from an unusually strong prior period?
- ?How sensitive is the net interest margin and credit quality to changes in the interest-rate cycle, given the high-leverage balance sheet and focus on long-duration power-sector loans?
PE
5.8
Forward PE
5.0
ROE
+20.0%
Profit margin
+70.5%
D/E
607.46
Dividend yield
+6.5%
Quality score
34/100
ROE 5y above 15%
4/5 yrs
FCF 5y positive
1/5 yrs
For informational purposes only. Not investment advice. VivaTrades is not a SEBI-registered Investment Adviser or Research Analyst. Market data sourced from public feeds; consult a registered adviser before any investment decision.Analysis generated 11 May 2026.