REC Ltd (RECLTD)
🎯 Key Takeaways
- REC Ltd is a large, government-owned financial institution operating in the infrastructure finance space, currently in a mature phase characterized by stable profitability and consistent shareholder returns. Despite flat revenue trends over recent quarters, the company is generating strong net profits and maintaining robust capital reserves, indicating operational efficiency rather than growth-driven expansion.
- Revenue declined 0.9% QoQ to ₹14,435 in Q1FY27.
- ⚠️ Regulatory scrutiny over board composition led to fines from NSE and BSE totaling ₹10,77,340 each, highlighting governance vulnerabilities despite gov
📖 The Story
REC Ltd is a large, government-owned financial institution operating in the infrastructure finance space, currently in a mature phase characterized by stable profitability and consistent shareholder returns. Despite flat revenue trends over recent quarters, the company is generating strong net profits and maintaining robust capital reserves, indicating operational efficiency rather than growth-driven expansion. Management emphasizes enhancing shareholder returns through regular dividends and has authorized significant private placement capacity, suggesting limited organic growth opportunities but confidence in capital allocation flexibility.
📰 What's Happening
In Q1 FY27, REC reported a 23% YoY increase in net profit to ₹4,149 crores, driven by a 5% rise in net interest income and a 15% YoY growth in net worth, alongside a reduction in Stage-3 loans to 0.11% of the portfolio. The company declared an interim dividend of ₹4.25 per share and confirmed a final dividend of ₹1.55 per share for FY26, totaling ₹5.80 per share within two months. The 57th AGM scheduled for August 25, 2026, will focus on approving FY26 net profit of ₹16,282 crores, appointing new directors including Shri Thangarajan Subash Chandira Bosh, and authorizing private placement up to ₹1,40,000 crores within one year. All resolutions at the recently concluded AGM were passed with required majority, including special resolutions for independent director appointments and auditor remuneration.
Source: Stock Announcements
📊 Quarterly Results (₹ Cr)
| Metric | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|
| Revenue | 14,737 | 15,153 | 15,051 | 14,564 | 14,435 |
| Operating Profit | 5,580 | 5,539 | 5,147 | 4,395 | 5,234 |
| OPM % | 37.9% | 36.6% | 34.2% | 30.2% | 36.3% |
| Net Profit | 4,466 | 4,415 | 4,052 | 3,375 | 4,193 |
| EPS | ₹16.96 | ₹16.77 | ₹15.39 | ₹12.69 | ₹15.92 |
Despite flat revenue in recent quarters — ₹14,435 crores in June 2026, ₹14,564 crores in March 2026, and ₹15,051 crores in December 2025 — net profit has shown resilience, declining only slightly from ₹4,466 crores in June 2025 to ₹4,193 crores in June 2026, while operating margins have remained stable around 36%. This stability in profitability amid modest revenue pressure reflects effective cost management and stable interest income trends. The reduction in Stage-3 loans to 0.11% of the portfolio further underscores improved asset quality, supporting confidence in future earnings visibility.
🔮 Management Outlook & What's Next
Management has consistently highlighted ample growth opportunities and affirmed a commitment to enhancing shareholder returns through regular dividend distributions. The Board has approved an interim dividend of ₹4.25 per share for FY27 and a final dividend of ₹1.55 per share for FY26, with record dates in late July and August 2026. Additionally, the company has authorized private placement up to ₹1,40,000 crores within one year and plans to appoint three new directors pending shareholder approval at the upcoming AGM, indicating continued focus on capital efficiency and governance continuity.
Extracted from official company announcements. Not StockFin.ai's opinion.
🏦 Balance Sheet (₹ Cr)
| Item | Mar 2025 | Mar 2025 | Mar 2026 | Mar 2026 |
|---|---|---|---|---|
| Equity Capital | 2,633 | 2,633 | 2,633 | 2,633 |
| Reserves | 70,877 | 75,743 | 80,848 | 81,863 |
| Borrowings | 4.84 L Cr | 4.96 L Cr | 5.16 L Cr | 5.15 L Cr |
| Total Liabilities | 5.95 L Cr | 6.15 L Cr | 6.40 L Cr | 6.40 L Cr |
| Fixed Assets | 622 | 627 | 617 | 615 |
| Investments | 6,790 | 6,674 | 8,172 | 9,832 |
| Total Assets | 5.95 L Cr | 6.15 L Cr | 6.40 L Cr | 6.40 L Cr |
The balance sheet shows steady growth in equity and reserves, with total equity of ₹2,633 crores and reserves of ₹81,863 crores as of March 2026, up from ₹75,743 crores in March 2025, reflecting strong retained earnings. Borrowings have increased slightly to ₹5.15 L Cr from ₹4.96 L Cr YoY, but remain well within manageable levels relative to asset size. Total assets have grown to ₹6.40 L Cr, supporting expansion in infrastructure finance without excessive leverage, suggesting a conservative and sustainable capital structure.
💰 Cash Flow Statement (₹ Cr)
| Item | Mar 2026 |
|---|---|
| Operating | +5,972 |
| Investing | -3,308 |
| Financing | -2,375 |
| Net Cash Flow | +289 |
👥 Shareholding Pattern
| Category | Q2FY26 | Q3FY26 | Q4FY26 | Q1FY27 |
|---|---|---|---|---|
| Promoters | 52.6% | 52.6% | 52.6% | 52.6% |
| FII | 18.0% | 16.5% | 15.8% | 15.8% |
| DII | 15.9% | 16.2% | 16.4% | 17.0% |
| Public | 11.3% | 12.2% | 12.5% | 11.9% |
| # Shareholders | 11,54,542 | 11,79,931 | 12,08,647 | 11,75,194 |
Institutional investor interest has shown mixed trends, with FII holding decreasing from 17.97% in Q2FY26 to 15.76% in Q1FY27, while DII holdings have remained relatively stable around 16%. Promoter holding remains steady at 52.63% over all quarters. The number of shareholders has increased slightly, from 11,54,542 in Q2FY26 to 11,75,194 in Q1FY27, indicating retail participation growth. No significant promoter pledging or large-scale exits by FIIs are evident, but the gradual decline in FII allocation may reflect broader market trends rather than company-specific concerns.
⚖️ Peer Comparison — Finance
| Company | MCap (₹ Cr) | P/E | ROCE | ROE | D/E |
|---|---|---|---|---|---|
| BAJFINANCE | 6.63 L Cr | 32.6 | 10.4% | 18.1% | 3.82 |
| BAJAJFINSV | 3.23 L Cr | 31.7 | 11.4% | 26.5% | 5.50 |
| SHRIRAMFIN | 2.57 L Cr | 19.3 | 11.5% | 17.1% | 3.80 |
| CHOLAFIN | 1.59 L Cr | 27.6 | 9.3% | 18.9% | 6.93 |
| JIOFIN | 1.58 L Cr | 74.2 | 2.3% | 1.6% | 0.17 |
| TATACAP | 1.56 L Cr | 28.5 | 8.4% | 12.3% | 5.28 |
| ICICIAMC | 1.52 L Cr | 30.4 | 111.5% | 83.6% | 0.00 |
| BAJAJHLDNG | 1.27 L Cr | 14.3 | 12.4% | 12.3% | 0.00 |
| MUTHOOTFIN | 1.20 L Cr | 10.6 | 14.4% | 29.3% | 3.88 |
| SBIFUNDS | 1.18 L Cr | — | — | — | 0.00 |
🔗 Peer Stock Analyses
⚠️ Risk Factors
1. Regulatory scrutiny over board composition led to fines from NSE and BSE totaling ₹10,77,340 each, highlighting governance vulnerabilities despite government oversight. 2. Declining FII holdings may pressure stock performance if trend continues, especially amid sectoral rotation. 3. Dependence on stable interest income and asset quality trends makes the company sensitive to macroeconomic shifts in infrastructure and power sectors. 4. Limited revenue growth constrains earnings expansion, making dividend sustainability reliant on continued margin stability and capital efficiency.
📋 Recent Filings
-
🟡 voting results 27 August 2026REC Limited held its 57th AGM on August 25, 2026 via video conference, with e-voting open from August 22-24 and extended 15 minutes post-meeting. Shar...
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🟡 Board Meeting 26 August 2026REC Limited disclosed that NSE and BSE imposed a fine of ₹10,77,340 each for non-compliance with board composition rules in the quarter ended June 30,...
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Announcement 1 August 2026REC Limited announced a change in its internal auditor effective August 1, 2026, with Shri Sahab Narain stepping down due to superannuation and Shri M...
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Announcement 30 July 2026REC Limited announced the incorporation of Kukshi Alirajpur Transmission Limited, a wholly owned subsidiary of its power arm REC Power Development and...
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🔴 annual report 30 July 2026REC Limited's 57th AGM scheduled for August 25, 2026, will approve FY2025-26 financials including ₹16,282 crore net profit, ₹18.55 dividend per share,...
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🔴 Corporate Action 24 July 2026REC Limited announced on July 24, 2026, an interim dividend of ₹4.25 per share for FY2026-27 with a record date of July 31, 2026, and a final dividend...
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🔴 Financial Results 24 July 2026REC Limited reported a 23% YoY increase in net profit to ₹4,149 crores for Q1 FY27, driven by a 5% rise in net interest income to ₹5,212 crores and a ...
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🟡 Board Meeting 24 July 2026No summary available
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Announcement 21 July 2026REC Limited announced the incorporation of Dharashiv Power Transmission Limited, a wholly owned subsidiary of its arm REC Power Development and Consul...
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Announcement 18 July 2026REC Limited announced the incorporation of two wholly owned subsidiaries, Beed Parli Power Transmission Limited and Yavatmal Power Transmission Limite...
🧠 Analyst's Read
REC Ltd remains a cash-generative, dividend-focused institution with strong capital reserves and improving asset quality, but its near-term trajectory is constrained by flat revenue growth and modest institutional interest. Investors should monitor FII trends, upcoming AGM outcomes on director appointments and private placement plans, and any guidance on future dividend policy or capital utilization strategy.
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 2026-09-01.
Editorial & Data Transparency Notice
This analysis was programmatically compiled using StockFin AI utilizing official regulatory disclosures from the BSE and NSE. Content is automatically synthesized and audited against public financial filings. StockFin.ai is an educational research platform and is NOT a SEBI-registered investment advisor or research analyst.
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