REC, formerly Rural Electrification Corporation Limited, is a Navratna company under the administrative control of the Ministry of Power. It is a non-banking financial institution that finances and promotes power projects across India. REC provides financial assistance to the power sector in all segments, including generation, transmission, and distribution. The company has a pan-India presence with regional offices and project offices in various states.
REC was established in 1962 with the objective of providing financial assistance to the rural electrification program in India. The company has since played a pivotal role in the development of the power sector in India. REC has financed over 16,000 power projects across the country, with a total loan outstanding of over ₹4 lakh crore.
REC is a leading player in the Indian power sector and has been recognized for its contributions to the development of the sector. The company has received numerous awards and accolades, including the prestigious SCOPE Meritorious Award for Infrastructure Development and the Dun & Bradstreet Corporate Award for Excellence in Financial Performance.
REC Overview
| Feature | Description |
|---|---|
| Company Name | REC |
| Company Type | Navratna company |
| Ministry | Ministry of Power |
| Industry | Power sector |
| Objective | Finance and promote power projects |
| Services | Financial assistance to power projects |
| Pan-India Presence | Yes |
| Regional Offices | Yes |
| Project Offices | Yes |
| Loan Outstanding | ₹4 lakh crore |
| Awards | SCOPE Meritorious Award for Infrastructure Development, Dun & Bradstreet Corporate Award for Excellence in Financial Performance |
REC Products
| Product Category | Products | Description |
|---|---|---|
| Loan Products | Long Term Loan, Medium Term Loan, Short Term Loan, Debt Refinancing, Equity Financing, Financing Of Equipment Manufacturing (Em) For Power Sector | REC provides a wide range of loan products to meet the diverse needs of the power sector. These products include long-term loans for financing large-scale power projects, medium-term loans for financing smaller power projects, and short-term loans for working capital requirements. REC also provides debt refinancing facilities, equity financing, and financing for the manufacturing of power equipment. |
| Financial Products | Structured Finance, Project Finance, Securitization, Treasury Operations | REC offers a range of financial products to support the power sector. These products include structured finance solutions, project finance for greenfield and brownfield projects, securitization solutions for securitizing power sector assets, and treasury operations for managing the company’s liquidity and risk profile. |
| Other Services | Advisory Services, Investment Banking Services, Project Management Services | REC provides a range of other services to support the power sector. These services include advisory services for project development, financial structuring, and regulatory compliance, investment banking services for raising capital from domestic and international investors, and project management services for managing the implementation of power projects. |
REC Awards and Recognition
| Award | Year | Awarded By | Category |
|---|---|---|---|
| Golden Peacock Award for Risk Management | 2023 | Institute of Directors (IOD) | Excellence in risk management |
| Best Employer for Policies in Diversity & Inclusion | 2023 | Assocham | Diversity & inclusion |
| Best Central PSU Award in the Financial Services category | 2023 | Dun & Bradstreet | Financial performance |
| ICAI Award for Financial Reporting | 2019 | Institute of Chartered Accountants of India (ICAI) | Financial reporting |
REC Fundamentals
| Fundamental | Value |
|---|---|
| Market Capitalization | ₹37,241.91 crore |
| Revenue | ₹30,779.51 crore |
| EBITDA | ₹9,444.36 crore |
| EPS | ₹24.49 |
| P/E Ratio | 7.09 |
| P/B Ratio | 1.86 |
| Dividend Yield | 1.84% |
| Debt/Equity Ratio | 2.38 |
| Book Value | ₹132.15 |
| Face Value | ₹10 |
| ROE | 21.30% |
| Debt | ₹24,855.25 crore |
REC Revenue and Net Profit
| Year | Revenue | Net Profit |
|---|---|---|
| 2022 | 30,779.51 | 5,411.69 |
| 2021 | 28,956.02 | 4,859.28 |
| 2020 | 24,731.34 | 4,135.25 |
| 2019 | 21,200.41 | 3,621.94 |
| 2018 | 18,544.43 | 3,097.63 |
REC Shareholding Patterns
| Shareholder Category | Shareholding Percentage |
|---|---|
| Promoter | 52.63% |
| Foreign Institutional Investors (FIIs) | 20.36% |
| Domestic Institutional Investors (DIIs) | 14.01% |
| Mutual Funds | 8.74% |
| Others | 4.26% |
REC Share Price Target for 2024, 2025, 2026, 2027, 2028
| Year | Share Price Target (₹) |
|---|---|
| 2024 | 382.80 |
| 2025 | 421.08 |
| 2026 | 463.19 |
| 2027 | 509.51 |
| 2028 | 560.46 |
REC Share Price Target for 2024
The REC Share Price Target for 2024 is ₹382.80.
REC Share Price Target for 2025
The REC Share Price Target for 2025 is ₹421.08.
REC Share Price Target for 2026
The REC Share Price Target for 2026 is ₹463.19.
REC Share Price Target for 2027
The REC Share Price Target for 2027 is ₹382.80.
REC Share Price Target for 2028
The REC Share Price Target for 2028 is ₹560.46.
REC Dividend History
| Year | Equity Dividend per Share (₹) | Dividend Yield (%) |
|---|---|---|
| 2023 | 15.60 | 4.11 |
| 2022 | 14.10 | 3.85 |
| 2021 | 12.60 | 3.44 |
| 2020 | 10.50 | 2.93 |
| 2019 | 10.50 | 2.93 |
REC Share Split History
| Split Date | Split Ratio |
|---|---|
| August 17, 2022 | 1:3 |
| September 28, 2016 | 1:2 |
Future Outlook of REC
Key Growth Drivers
- Growing demand for power: The demand for power in India is expected to grow at a CAGR of 6% over the next decade. This growth will be driven by factors such as urbanization, rising incomes, and increasing industrialization.
- Government initiatives: The Government of India is committed to promoting renewable energy and energy efficiency. These initiatives will create new opportunities for REC.
- Focus on rural electrification: REC is committed to providing financial assistance for rural electrification projects. This focus will help to bridge the gap between rural and urban electrification levels.
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Risks Associated With Investing in REC
| Risk | Description |
|---|---|
| Regulatory risks | The power sector is subject to a number of regulatory risks, including changes in tariffs and subsidies. These risks could impact REC’s financial performance. |
| Competition | The power sector is highly competitive, and REC faces competition from both domestic and international players. |
| Economic risks | REC’s financial performance is also sensitive to economic conditions. A slowdown in economic growth could impact the demand for power and REC’s profitability. |
REC Competitors
| Competitor | Description |
|---|---|
| Power Finance Corporation Ltd. | Power Finance Corporation Ltd. (PFC) is a leading infrastructure finance company in India. The company provides finance for the development of power projects in India. PFC has a strong track record of financial performance and is backed by the Government of India. |
| PTC India Financial Services Ltd. | PTC India Financial Services Ltd. (PFS) is a non-banking financial company that provides financial services to the power sector. The company provides project finance, structured finance, and investment banking services. PFS is a subsidiary of PTC India Ltd., a leading power trading company in India. |
| Bajaj Finance Ltd. | Bajaj Finance Ltd. (Bajaj Finserv) is a non-banking financial company that provides a wide range of financial services, including consumer finance, investment banking, and insurance. Bajaj Finserv is one of the largest non-banking financial companies in India. |
| India Infoline Limited | India Infoline Limited (IIFL) is a financial services company that provides a wide range of financial services, including investment banking, stock broking, and wealth management. IIFL is one of the leading financial services companies in India. |
| ICICI Securities Limited | ICICI Securities Limited (ICICI Securities) is a stock broking and investment banking firm in India. ICICI Securities is a subsidiary of ICICI Bank, one of the largest private sector banks in India. |
REC Share Price FAQs
Q: What is the target share price of REC for 2024?
A: The consensus share price target for REC is ₹382.80 for 2024. This represents an upside of 10% from the current price of ₹348.
Q: What is the outlook for REC’s share price?
A: Analysts are bullish on the outlook for REC’s share price. The company is well-positioned to capitalize on the growth opportunities in the Indian power sector. However, REC is also exposed to a number of risks that investors should consider.
Q: What are the risks associated with investing in REC?
A: The main risks associated with investing in REC are regulatory risks, competition, and economic risks.
Q: What are REC’s competitors?
A: REC’s main competitors are Power Finance Corporation Ltd. (PFC), PTC India Financial Services Ltd. (PFS), Bajaj Finance Ltd., India Infoline Limited (IIFL), and ICICI Securities Limited.
Q: What are REC’s ratings and reviews?
A: REC has a strong track record of financial performance and is well-managed. The company is expected to continue to grow its revenue and profits in the coming years. REC is rated as a “Buy” by most analysts.
DISCLAMER: We are not SEBI registered. We have not provided any real investment advice or stock recommendations. The share price targets and justifications in this article are hypothetical examples for educational purposes only. Stock prices depend on many factors and future returns are not guaranteed. Readers should do their own research before investing. Or consult a registered financial advisor for guidance. We do not guarantee any stock performance or returns. Investing in stocks involves risks.
