REC Limited (RECLTD) AI Stock Analysis

• Market Cap: ₹994.44B
• Dividend Yield: 5.13%
• Average Volume (3M): 292.18K
• Price to Earnings (P/E): 5.9
• Beta (1Y): 1.77
• Revenue Growth: 20.32%
• EPS Growth: 15.42%
• Country: IN
• Employees: 512
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 16.90
• Shares Outstanding: 2,633,224,000
• 10 Day Avg. Volume: 334,595
• 30 Day Avg. Volume: 292,182
• 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: ₹499.00
• Price Target Upside: 33.91% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 68 Neutral
• Price Target: ₹406.00 ▲(8.95% Upside)

REC Limited's strong valuation and financial performance are offset by weak technical indicators. The low P/E ratio and high dividend yield are attractive, but high leverage and negative cash flows are concerns. The bearish technical trend further tempers the overall score.

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 the interest income it earns from the loans and financial services provided to its clients in the power sector. The company offers a range of financial products, including long-term and short-term loans, which carry varying interest rates based on market conditions and borrower profiles. A significant portion of its income is derived from the interest spread, which is the difference between the interest rate charged to borrowers and the cost of funds for REC Limited. Additionally, the company may earn fees and commission income from consultancy services and project appraisals. Strategic partnerships with government bodies and private sector players also enhance its ability to secure large-scale power projects, contributing to its revenue growth.

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	572.57B	559.11B	466.88B	386.92B	384.19B	351.46B
Gross Profit	300.81B	217.83B	449.89B	368.16B	163.68B	136.57B
EBITDA	378.13B	201.42B	179.84B	360.80B	334.45B	316.13B
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: 372.65
• 50DMA: Negative
• 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 372.65 is below the 20-day moving average (MA) of 377.66, below the 50-day MA of 377.80, and below the 200-day MA of 405.24, indicating a bearish trend. The MACD of 0.30 indicates Negative momentum. The RSI at 50.87 is Neutral, neither overbought nor oversold. The STOCH value of 53.87 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	74 Outperform	₹1.35T	6.96	―	3.19%	7.78%	2.18%
PFC	71 Outperform	₹1.34T	5.51	―	4.00%	14.06%	17.29%
SHRIRAMFIN	70 Outperform	₹1.25T	12.94	―	1.94%	20.27%	25.95%
RECLTD	68 Neutral	₹994.44B	5.90	―	5.13%	20.32%	15.42%
PNB	68 Neutral	₹1.31T	7.80	―	2.57%	15.52%	37.23%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
IRFC	66 Neutral	₹1.66T	24.90	―	1.85%	2.06%	3.45%

REC Limited Corporate Events

REC Limited Announces 56th Annual General Meeting and Annual Report Release

REC Limited has announced its 56th Annual General Meeting (AGM) scheduled for August 27, 2025, which will be conducted via video conferencing. The company has released its Annual Report for the financial year 2024-25, which is available on its website and through the National Securities Depository Limited. Shareholders are informed of the cut-off date for e-voting eligibility and the period for remote e-voting. The announcement underscores REC Limited’s commitment to transparency and stakeholder engagement, ensuring shareholders are informed and able to participate in the decision-making process.

REC Limited Submits Business Responsibility and Sustainability Report for FY 2024-25

REC Limited has submitted its Business Responsibility and Sustainability Report (BRSR) for the financial year 2024-25 to the stock exchanges, in compliance with SEBI regulations. The report, which is part of the company’s annual report, includes an Independent Reasonable Assurance Report by Corporate Professionals, New Delhi. This submission underscores REC Limited’s commitment to sustainability and responsible business practices, potentially enhancing its reputation and trust among stakeholders.

REC Limited Schedules Investor Conference Call to Discuss Q1FY26 Earnings

REC Limited has announced an upcoming conference call scheduled for July 31, 2025, to discuss its financial results for the quarter ended June 30, 2025. This call will provide investors and analysts with insights into the company’s recent performance, potentially impacting its market positioning and stakeholder interests. The audio recording and transcript of the call will be made available on the company’s website.