India’s finance sector has shown robust growth, with Scheduled Commercial Banks’ gross non-performing assets dropping to a 12-year low of 2.6% in September 2024 and profit after tax rising 22.2% year-on-year. Aggregate bank deposits grew 11.1% by November 2024, while the fintech market is projected to reach $155.7 billion in 2025
With a market capitalization of Rs 1.01 lakh crore, the shares of REC Ltd closed at Rs 384.80 per share, decreased around 1.89 percent as compared to the previous closing price of Rs 392.20 apiece.
CLSA, one of the well-known brokerages globally, maintained its “high conviction outperform” rating on this PSU stock with a target price of Rs 525 apiece, indicating a potential upside of 36 percent from Friday’s closing price of Rs 384.80 per share.
REC closed FY25 with an 11 percent year-on-year rise in assets under management, as per CLSA. Growth was limited by higher repayments, which stood at 26 percent of opening loans versus 20 percent in FY24. However, disbursals increased 18 percent over the previous year, supporting overall performance.According to the brokerage, REC has maintained a strong asset quality with no slippages over the past three years. The higher credit cost in FY25 was mainly due to increased standard asset provisions, which offset gains from write-backs linked to resolved projects.
Recently, the company reported positive Q4 results, with revenue increased by 7 percent on a quarter-on-quarter basis from Rs 14,272 crore in Q3FY25 to Rs 15,334 crore in Q4FY25. Further, revenue increased by 21 percent year on year, from Rs 12,677 crore in Q4FY24 to Rs 15,334 crore in Q4FY25.
The company’s net profit increased by 6 percent on a quarter-on-quarter basis, from Rs. 4,076 crore in Q3FY25 to Rs. 4,310 crore in Q4FY25. Further, net profit magnified significantly by 6 percent year on year from Rs 4,079 crore in Q4FY24 to Rs 4,310 crore in Q4FY25.
Written by Ashok Kumar