REC Limited (RECLTD) AI Stock Analysis

• Market Cap: ₹957.44B
• Dividend Yield: 5.56%
• Average Volume (3M): 256.74K
• Price to Earnings (P/E): 5.6
• Beta (1Y): 1.58
• Revenue Growth: 18.51%
• EPS Growth: 16.04%
• Country: IN
• Employees: 512
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 16.80
• Shares Outstanding: 2,633,224,000
• 10 Day Avg. Volume: 217,230
• 30 Day Avg. Volume: 256,735
• PEG Ratio: 0.57
• Price to Book (P/B): 1.40
• Price to Sales (P/S): 1.97
• P/FCF Ratio: -2.81
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: ₹434.00 ▲(13.96% Upside)

REC Limited's strong valuation and positive technical indicators are the most significant factors driving its score. While financial performance shows promise, high leverage and negative cash flows pose risks that need addressing. The absence of earnings call and corporate events data limits the analysis to these key areas.

Positive Factors

Revenue Growth

Strong revenue growth indicates REC's successful expansion in the power sector, enhancing its market position and long-term financial stability.

Profitability

Improved profitability reflects efficient cost management and a robust business model, supporting sustainable financial performance.

Market Position

REC's strong market position in the power sector, supported by government partnerships, ensures stable demand and growth opportunities.

Negative Factors

High Leverage

High leverage can increase financial risk, potentially impacting REC's ability to invest in growth and manage economic downturns.

Cash Flow Challenges

Persistent negative cash flow suggests liquidity issues, which could constrain REC's operational flexibility and investment capacity.

Operational Inefficiencies

Operational inefficiencies may hinder profitability and growth, necessitating improvements in cost management and process optimization.

REC Limited Business Overview & Revenue Model

Company Description

REC Limited, a public financial institution, provides financing services for power generation, transmission, and distribution projects in India. It primarily offers term-loan, medium-term loan, and short-terms loan. The company also acts as a nodal agency for the implementation of Pradhan Mantri Sahaj Bijli Har Ghar Yojana for universal household electrification, Deen Dayal Upadhyaya Gram Jyoti Yojana, National Electricity Fund, Outage Management System, and 11kv Rural Feeder Monitoring Scheme, as well as acts as the bid process coordinator for selection of transmission service provider through tariff based competitive bidding process for independent inter-state and intra-state transmission projects; and provides implementation and consultancy services in power sector. It serves central/state government power utilities, as well as private sector power utilities. The company was formerly known as Rural Electrification Corporation Limited and changed its name to REC Limited in October 2018. REC Limited was incorporated in 1969 and is based in Gurugram, India. REC Limited is a subsidiary of Power Finance Corporation Limited.

How the Company Makes Money

REC Limited generates revenue primarily through interest income from loans and advances provided to power sector projects. The company offers financial products such as term loans, project financing, and working capital loans, which are instrumental in supporting electricity generation, transmission, and distribution. Additionally, REC earns income through fees for consultancy services and various financial instruments. The company is supported by its partnerships with government entities and financial institutions, which enhance its market reach and enable access to a wider customer base. REC's revenue is significantly influenced by the growth of the power sector in India and government policies promoting energy infrastructure development.

REC Limited Financial Statement Overview

Summary

REC Limited shows strong revenue and profit growth, which is promising for future performance. However, high leverage and negative cash flows present potential risks. Addressing operational inefficiencies and improving cash flow management will be crucial for sustaining growth and financial health.

Income Statement

REC Limited has shown a strong revenue growth trajectory, with a significant increase in total revenue from 2024 to 2025. The gross profit margin remains robust, indicating efficient cost management. Net profit margin also increased, showcasing improved profitability. However, the decline in EBIT and EBITDA margins in 2025 compared to previous years suggests some operational inefficiencies that need attention.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio, indicating significant leverage, which could pose a risk if not managed properly. Nevertheless, the company maintains a strong return on equity, highlighting efficient use of equity to generate profits. The equity ratio is moderate, suggesting a balanced asset management strategy.

Cash Flow

REC Limited's cash flow statement reveals challenges, with negative operating cash flow and free cash flow over multiple years. This trend indicates potential liquidity concerns that need addressing. The operating cash flow to net income ratio is unfavorable, suggesting that net income is not translating effectively into cash flow.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	571.89B	560.31B	471.88B	383.34B	384.19B	351.47B
Gross Profit	221.46B	219.00B	172.41B	146.01B	163.69B	136.58B
EBITDA	214.60B	201.42B	179.84B	139.22B	124.49B	107.90B
Net Income	168.90B	158.84B	141.45B	111.67B	100.36B	83.78B
Balance Sheet
Total Assets	0.00	6.15T	5.48T	4.66T	4.11T	4.01T
Cash, Cash Equivalents and Short-Term Investments	0.00	6.32B	4.98B	487.00M	1.41B	12.86B
Total Debt	0.00	4.96T	4.46T	3.81T	3.33T	3.30T
Total Liabilities	-783.76B	5.36T	4.79T	4.07T	3.60T	3.57T
Stockholders Equity	783.76B	783.76B	693.50B	581.21B	513.14B	437.64B
Cash Flow
Free Cash Flow	-221.79B	-391.46B	-577.56B	-373.77B	-39.58B	-435.87B
Operating Cash Flow	-221.13B	-390.64B	-577.23B	-373.60B	-39.10B	-435.12B
Investing Cash Flow	-13.34B	-13.02B	-18.31B	-9.43B	-2.87B	8.61B
Financing Cash Flow	177.24B	400.34B	595.88B	381.23B	31.59B	421.13B

REC Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 380.85
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:RECLTD, the sentiment is Neutral. The current price of 380.85 is above the 20-day moving average (MA) of 356.98, above the 50-day MA of 358.09, and above the 200-day MA of 378.77, indicating a neutral trend. The MACD of 6.11 indicates Negative momentum. The RSI at 51.86 is Neutral, neither overbought nor oversold. The STOCH value of 62.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IN:RECLTD.

REC Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BANKBARODA	81 Outperform	₹1.55T	8.08	―	2.86%	4.40%	-3.84%
RECLTD	75 Outperform	₹957.44B	5.56	―	5.56%	18.51%	16.04%
PNB	75 Outperform	₹1.41T	8.29	―	2.40%	12.10%	12.93%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SHRIRAMFIN	67 Neutral	₹1.83T	18.59	―	1.08%	21.24%	22.61%
IRFC	66 Neutral	₹1.59T	23.19	―	1.52%	-0.41%	4.98%
PFC	65 Neutral	₹1.18T	4.79	―	4.62%	13.05%	16.78%

REC Limited Corporate Events

REC Incorporates Apta Power Transmission to Execute Maharashtra Intra-State Project

REC Limited has announced the incorporation of Apta Power Transmission Limited as a wholly owned subsidiary of its arm REC Power Development and Consultancy Limited, making it an indirect subsidiary of REC Limited. The newly formed entity, with an authorised and paid-up capital of ₹5 lakh, has been established to develop the 765/400/220 kV AIS Apta transmission project in Raigad district, Maharashtra, which was allotted by the state government with RECPDCL appointed as bid process coordinator; after a winning bidder is selected under tariff-based competitive bidding guidelines, the project company will be transferred along with all its assets and liabilities, underscoring REC’s continuing role as a key facilitator and transaction manager in India’s power transmission build-out rather than a long-term asset owner in this case.

REC Incorporates Ambernath Power Transmission Subsidiary for Maharashtra GIS Project

REC Limited has announced the incorporation of Ambernath Power Transmission Limited as a wholly owned subsidiary of its arm REC Power Development and Consultancy Limited, thereby making it an indirect subsidiary of REC. The new entity, set up with an authorised and paid-up capital of ₹5 lakh, has been created to implement a 400/220 kV GIS substation project at Ambernath in Thane district, Maharashtra, an intra-state transmission project allocated by the state government for which RECPDCL is acting as bid process coordinator. Once a successful bidder is selected under tariff-based competitive bidding guidelines, the newly incorporated company, along with its assets and liabilities, will be transferred to that bidder, underscoring REC’s role as a key facilitator and developer in India’s power transmission infrastructure rather than the long-term asset owner.

REC Limited to Discuss Q2FY26 Financial Results in Upcoming Investor Call

REC Limited has announced a scheduled conference call with investors and analysts to discuss its financial results for the quarter and half-year ending September 30, 2025. This call, set for October 29, 2025, aims to provide updates on the company’s performance, potentially impacting its market positioning and offering insights into its operational strategies.