REC Limited (RECLTD)

Financial Services · Finance · NSE · Updated 15 July 2026

₹351.7 ↓ 12.37% (1Y)

🎯 Key Takeaways

REC Limited is undergoing a strategic consolidation in the power sector through its proposed merger with Power Finance Corporation (PFC), while simultaneously addressing governance and leadership updates to strengthen board composition and regulatory compliance. The company is actively pursuing capital raising through bond issuance to fund future growth, signaling a shift toward expanded financial leverage and sector consolidation.
Revenue grew 4.3% QoQ to ₹14,272 in Q3FY25.
⚠️ The merger with PFC remains subject to shareholder approval and regulatory clearance, introducing execution and sentiment risks.

Market Cap

₹91,070

P/E Ratio

5.8

Div Yield

0.00%

Promoter

0.0%

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📖 The Story

REC Limited is undergoing a strategic consolidation in the power sector through its proposed merger with Power Finance Corporation (PFC), while simultaneously addressing governance and leadership updates to strengthen board composition and regulatory compliance. The company is actively pursuing capital raising through bond issuance to fund future growth, signaling a shift toward expanded financial leverage and sector consolidation.

📰 What's Happening

In late June 2026, REC announced the merger with PFC with an 88:100 share exchange ratio and plans to raise up to ₹40,000 crores via private placement of bonds, pending shareholder approval at the upcoming AGM. Concurrently, four senior executives were promoted to Executive Director roles effective June 28, 2026, and two independent directors with expertise in environmental governance and public sector finance were appointed to enhance board capabilities. These moves reflect a deliberate effort to streamline operations, improve governance, and position the entity for larger-scale financing in the evolving power infrastructure landscape.

Source: Stock Announcements

📊 Quarterly Results (₹ Cr)

Metric	Q4FY23	Q1FY24	Q2FY24	Q3FY24	Q4FY24	Q1FY25	Q2FY25	Q3FY25
Revenue	10,243	11,088	11,688	12,052	12,677	13,079	13,682	14,272
Operating Profit	10,404	10,776	12,194	11,831	13,131	12,375	13,609	14,024
OPM %	101.5%	97.2%	104.2%	98.0%	103.3%	94.5%	99.3%	98.2%
Net Profit	3,065	2,968	3,790	3,308	4,079	3,460	4,038	4,076
EPS	₹11.51	₹11.27	₹14.39	₹12.56	₹15.36	₹13.14	₹15.33	₹15.48

The company has demonstrated stable and improving profitability trends, with operating margins consistently above 94% over the past eight quarters, peaking at 104.2% in Q2FY24. Revenue has grown steadily from ₹10,243 crores in Q4FY23 to ₹14,272 crores in Q3FY25, while net profit has expanded from ₹3,065 crores to ₹4,076 crores over the same period. EPS has risen from ₹11.51 to ₹15.48, indicating strong bottom-line momentum. This financial resilience provides a solid foundation for the proposed merger and capital raise, as the company continues to generate robust operating cash flows despite macroeconomic headwinds.

🔮 Management Outlook & What's Next

Management has explicitly signaled its intent to raise up to ₹40,000 crores through a private placement of bonds to support the merger with PFC and potentially fund future growth initiatives, subject to shareholder approval at the upcoming AGM. While no detailed financial projections were provided, the fundraise is framed as a strategic enabler for consolidation in the power sector. Additionally, the board is actively working to resolve SEBI listing non-compliance by expediting the appointment of Independent Directors through the Ministry of Power, underscoring a focus on governance rectification and regulatory alignment.

Extracted from official company announcements. Not StockFin.ai's opinion.

⚖️ Peer Comparison — Finance

Company	MCap (₹ Cr)	P/E	ROCE	ROE	D/E
Bajaj Finance Limited	5.67 L Cr	30.9	22.4%	18.6%	1.37
Bajaj Finserv Limited	2.77 L Cr	14.4	—	13.4%	—
Shriram Finance Limited	2.21 L Cr	23.3	—	—	—
Jio Financial Services Limited	1.54 L Cr	92.1	—	—	—
Power Finance Corporation Limited	1.47 L Cr	5.0	—	—	—
Muthoot Finance Limited	1.33 L Cr	26.6	—	—	—
Cholamandalam Investment and Finance Company Limited	1.32 L Cr	31.9	—	—	—
Tata Capital Limited	1.31 L Cr	—	—	—	—
Indian Railway Finance Corporation Limited	1.29 L Cr	18.4	—	—	—
Bajaj Holdings & Investment Limited	1.15 L Cr	15.3	—	—	—

🔗 Peer Stock Analyses

BAJFINANCE BAJAJFINSV SHRIRAMFIN JIOFIN PFC

⚠️ Risk Factors

1. The merger with PFC remains subject to shareholder approval and regulatory clearance, introducing execution and sentiment risks. 2. The proposed ₹40,000 crore bond raise may lead to significant dilution and increased leverage, potentially impacting credit metrics and investor sentiment. 3. Ongoing SEBI penalties for board composition non-compliance could result in additional fines if resolutions are delayed. 4. Integration risks associated with merging operations and cultures of REC and PFC could affect operational efficiency and long-term value creation.

📋 Recent Filings

🧠 Analyst's Read

REC is transitioning into a more consolidated, capital-efficient entity within the power sector, driven by strategic mergers and governance upgrades. The financial foundation is strong, but investors should closely monitor the progress of the PFC merger, the outcome of the AGM vote on bond issuance, and the pace of Independent Director appointments to assess execution risk and long-term value creation potential.

Based on filing content and financial data. Not a recommendation.

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Data sourced from stock announcements. Analysis generated by StockFin.ai.
For informational purposes only — not investment advice. Updated 2026-07-15.

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