REC Share Price

REC Ltd: Fundamental Analysis of India's Leading Finance Company

REC Limited is amongst the most prominent Indian companies that offer loan facilities to the state power sector for power generation, transmission, and distribution. It aims to provide financial services to different entities in the power business segment, such as state electricity boards, government utilities, and private utilities. The following analysis of REC Ltd share price, REC Ltd share price NSE, etc will estimate the company’s financial standing and future development.

About REC Ltd

REC Ltd is a company enjoying Maharatna status for its operations and functions under the administrative jurisdiction of the Ministry of Power, Government of India. It has been enlisted with the Reserve Bank of India under section 45 IA of the RBI Act as NBFC (Non-Banking Financial Company), PFI (Public Financial Institution) and IFC (Infrastructure Financing Company).

This company was established in 1969, during a dismal drought and famine, to drive agricultural pump sets for irrigation. The financing mandate has expanded from pure power generation to power transmission and distribution, renewable energy generation, and new technologies such as electric vehicles, batteries, green hydrogen, etc.

It has also entered the non-power infrastructure sector, which includes roads and expressways, Metro Rail, Airports, etc. It also includes IT Communication, social infrastructure, commercial infrastructure such as educational institutions and hospitals, ports, and electro-mechanical (E&M) works in the Steel and refinery sectors.

To create infrastructural assets, REC provides long-term loans and related financing products to state, central, and private companies. It plays an integral role in the government's flagship power sector schemes. REC has also been associated as the nodal agency for Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGAYA), Deen Dayal Upadhaya Gram Jyoti Yojana (DDUGJY), and the National Electricity Fund (NEF) Scheme.

Finance Industry Overview

This stance is supported by established and emerging nations, which frequently declare plans to invest billions of dollars in expanding and improving their infrastructure. Finance for infrastructure projects is crucial since infrastructure is a top concern globally. Consequently, the topic of infrastructure financing has grown to be a whole.

India must improve its infrastructure to achieve its goal of US$5 trillion in economic growth by 2025. To accommodate its growing population and developing economy, it must invest in better transportation infrastructure, such as roads, trains, aeroplanes, ships, and inland waterways.

Infrastructure development boosts business and entrepreneurial prospects while having a multiplier effect on demand and transportation efficiency. In addition, Budget 2023–24 includes a significantly increased outlay of ₹ 1.3 lakh crore for the one-year extension of the 50-year interest-free loan to state governments, which is intended to encourage infrastructure investment and policy actions that complement it.

REC Ltd competitors

Some of REC Ltd's significant competitors include:

• IRFC
• Power Finance Corporation Ltd.
• Indian Renewable Energy Development Agency Ltd

REC Ltd enjoys competitive advantages such as solid client relationships, compliance standards, diverse service offerings, and cost efficiencies. However, competition has intensified as more players enter the contract services space.

REC Ltd Share Price History

Rural Electrification Corporation Private Limited was a private limited company formed under the Companies Act on July 25, 1969. Its main goal was to fund the nation's electricity projects in rural areas. On June 3, 1970, the word "private" was eliminated from the company. Due to the name change upon conversion to a public limited company, a new certificate of incorporation was issued on July 18, 2003.

• 1992: It was declared a Public Financial Institution under section 4A of the Companies Act.
• 2018: REC also launched a USD 300 million dollar-dominated bond.
• 2021: The Ministry of Corporate Affairs approved the Scheme of Amalgamation of REC Transmission Projects Company Limited with REC Power Distribution Company Limited (wholly owned subsidiaries of REC) on February 5, 2021.
• 2022: REC Ltd bonus share in the Ratio of 1:3.

Company Profile: Strengths and Weaknesses

Strengths

• Strong Performer, Under Radar Stocks (DVM)
• Consistent Highest Return Stocks over Five Years - Nifty500
• Company with high TTM EPS Growth
• Annual Profit Growth higher than Sector Profit Growth
• REC Ltd share dividend history greater than sector dividend yield
• Good quarterly growth in the recent results
• Effectively using its capital to generate profit - RoCE has improved in the last 2 years
• Growth in Net Profit with increasing Profit Margin (QoQ)
• Growth in Quarterly Net Profit with increasing Profit Margin (YoY)
• Company reducing Debt
• Increasing Revenue and REC Ltd share price every Quarter for the past 4 Quarters
• Company able to generate Net Cash - Improving Net Cash Flow for last 2 years
• Annual Net Profits have improved for the last 2 years
• Company with Zero Promoter Pledge
• FII / FPI or Institutions increasing as per latest REC Ltd share news
• MFs increased their shareholding last Quarter

Weaknesses

• Poor cash generated from core business - Declining Cash Flow from Operations for the last 2 years
• Sell Zone: Stocks in the sell zone are based on days traded at current PE and P/B.

The financials

Shareholding Pattern of. REC Ltd.

Here's the shareholding pattern of REC Ltd as per REC Ltd share price.

• Promoters: 52.63%
• Foreign Institutional Investors (FIIs): 19.91%
• Domestic Institutional Investors (DIIs): 15.44%
• Public: 11.96%

REC Ltd has a healthy mix of promoters and institutional and public shareholders. The REC Ltd share price demonstrates the company's positive investment appeal for domestic and foreign investors.

*The shareholding data is as of March 2024 and may change over time.

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