REC Ltd.
NSE: RECLTDREC Ltd.: A 30-second snapshot
REC Ltd is a government-backed power-sector NBFC trading at Rs 331.4, a PE of 5.36 — the lowest among the 6 tracked sector peers — with a dividend yield of 6.87%. The stock is down 13.38% over 12 months, below both its 50-DMA and 200-DMA, with 5-year earnings growth of -21.9% and FCF positive in only 1 of the tracked years against a rising debt trend.
P/E
5.4
Forward P/E
4.7
ROE
+20.0%
Debt / Equity
607.46
Profit Margin
+70.5%
Div. Yield
+6.9%
5Y ROE > 15%
4/5
5Y FCF > 0
1/5
Quality
45/100
News
7 headlines · 1 positive · 1 negative
REC Ltd stock (INE020B01018): Power-sector lender posts strong Q4, hikes dividend and expands transm - AD HOC NEWS
AD HOC NEWS
RECLTD.NS REC Limited Earnings Miss: EPS Falls Short - Meyka
Meyka
REC completes sale of two subsidiaries for over ₹16.66 crore - Business Upturn
Business Upturn
India's state-run REC, SIDBI eye floating-rate bond sales before RBI decision, sources say - marketscreener.com
marketscreener.com
REC Ltd stock (INE020B01018): leadership changes and growth outlook - AD HOC NEWS
AD HOC NEWS
Recent context
- ·Q4 results coverage is split: one headline (Meyka, May 2026) flags an EPS miss while another (AD HOC NEWS, May 2026) describes strong Q4 performance and a dividend hike, illustrating divergent interpretations of the same quarterly result.
- ·REC completed the sale of two subsidiaries for over Rs 16.66 crore (Business Upturn, May 2026) and is reportedly exploring floating-rate bond issuances ahead of an RBI rate decision (marketscreener.com, May 2026).
- ·Leadership changes were noted in mid-May 2026 (AD HOC NEWS) alongside references to a growth outlook update; the news sample of 7 articles is sparse and neutral-skewed (5 neutral, 1 positive, 1 negative).
Strengths
- +PE of 5.36 and forward PE of 4.66 are the lowest in the 6-peer Banking/NBFC comparison group, which includes HDFC Bank (16.6), Bajaj Finance (29.1) and Bajaj Finserv (28.8).
- +ROE of 19.96% ranks 1st among all 6 tracked sector peers, above Bajaj Finance (17.91%), HDFC Bank (13.82%), Axis Bank (13.15%) and HDFC Life (11.28%).
- +Dividend yield of 6.87% and ROE above 15% in 4 of the tracked years reflect a history of distributing earnings while maintaining above-threshold equity returns.
- +Mean analyst rating of 1.69 across 13 analysts (1–5 scale, lower = more constructive), indicating a constructive tilt in sell-side coverage.
Weaknesses
- −5-year revenue growth of -14.4% and 5-year earnings growth of -21.9% reflect persistent contraction in top-line and bottom-line over the measured period.
- −FCF was positive in only 1 of the tracked years with a rising debt trend; the loan book is funded primarily through incremental borrowings, leaving the balance sheet sensitive to funding-cost and credit-cycle shifts.
- −Quality score of 34 ranks 4th of 6 sector peers and the consistency score of 56 is moderate, with the reported ROE of 19.96% substantially amplified by a D/E of 607.5.
- −Price is below both the 50-DMA (Rs 346.49) and 200-DMA (Rs 352.8), with a 52-week drawdown of 18.52% and a 12-month return of -13.38%.
Open questions
- ?To what extent does the 5-year earnings contraction reflect a structural shift in the power-sector lending cycle, versus accounting or classification changes in reported revenue?
- ?Given FCF positive in only 1 of the tracked years and a D/E of 607.5, how does the company plan to manage refinancing risk if benchmark rates remain elevated for an extended period?
- ?Does the gap between the reported profit margin of 70.55% and the weak FCF generation suggest a significant divergence between accrual-based income recognition and cash collection on the loan book?
- ?How has the change in leadership affected capital allocation priorities, and is there a stated plan to address the declining 5-year revenue and earnings growth trend?
Peer comparison: Banking
Ranks 4 of 6 on quality| Symbol | Name | P/E | ROE | Quality |
|---|---|---|---|---|
| RECLTD | REC Ltd.You're viewing | 5.4 | +20.0% | 34 |
| Industry avg | across 5 peers | 31.2 | +14.2% | 39 |
| BAJFINANCE | Bajaj Finance Ltd. | 29.1 | +17.9% | 53 |
| AXISBANK | Axis Bank Ltd. | 15.1 | +13.2% | 50 |
| HDFCBANK | HDFC Bank Ltd. | 16.6 | +13.8% | 50 |
| BAJAJFINSV | Bajaj Finserv Ltd. | 28.8 | +14.6% | 23 |
| HDFCLIFE | HDFC Life Insurance Company Ltd. | 66.2 | +11.3% | 20 |
Technical state
Current price
₹331.40
SMA 50
₹346.49
SMA 200
₹352.80
RSI (14)
37.0 (neutral)
From 52w high
-18.5%
1Y return
-13.4%
3M return
-5.5%
50-DMA
Below
200-DMA
Below
Algorithmic support levels
Algorithmic resistance levels
Risk flags
- high5-year revenue growth of -14.4% and 5-year earnings growth of -21.9% indicate persistent contraction in reported top-line and bottom-line over the period; FCF was positive in only 1 of the tracked years against a rising debt trend, indicating loan-book expansion is funded primarily by incremental borrowings rather than internally generated cash.
- highDebt-to-equity of 607.5 is characteristic of the government-NBFC lending model but, combined with FCF positive in only 1 tracked year and a rising debt trend, leaves the balance sheet highly sensitive to funding-cost shifts and credit-cycle deterioration.
- mediumCurrent price of Rs 331.4 is below both the 50-DMA (Rs 346.49) and 200-DMA (Rs 352.8); stock is down 13.38% over 12 months and 5.5% over 3 months; drawdown from the 52-week high stands at 18.52%.
- mediumQuality score of 34 ranks 4th of 6 sector peers and the consistency score of 56 is moderate; the reported ROE of 19.96% is amplified substantially by leverage rather than reflecting underlying capital efficiency.
- lowNews sample is sparse at 7 articles total; Q4 coverage includes an EPS miss report (Meyka, May 2026) alongside a strong-Q4 headline, indicating divergent readings of the same result and limited information depth for the current period.
Cross-section contradictions
- ROE of 19.96% ranks 1st among 6 sector peers and PE of 5.36 is the lowest in the peer group, yet the stock is down 13.38% over 12 months and has traded below both its 50-DMA and 200-DMA — the valuation discount relative to reported profitability metrics has persisted through recent price action.
- 5-year earnings growth of -21.9% and FCF positive in only 1 tracked year coexist with a reported profit margin of 70.55% — the high margin reflects the NBFC interest-spread model and does not capture the cash-generation constraint imposed by leverage and the rising debt trend.
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.
Fundamentals & technicals: refreshed 25 Jun 2026 · refreshed daily at 01:00 IST
AI synthesis (narrative, snapshot, strengths/weaknesses, peer ranking): generated 1 Jun 2026 · rotates through NIFTY 500 every ~5 days