This stock represents a compelling value opportunity in the current market environment. While most infrastructure and mid-cap stocks are trading at elevated valuations, this stock continues to trade at deep value levels despite delivering record profits, maintaining a strong balance sheet, and offering clear long-term growth visibility. For investors seeking a blend of income, capital appreciation, and downside protection, REC Ltd stands out as a high-quality long-term investment.
Founded in 1969 to support rural electrification, REC has evolved into a Maharatna, AAA-rated NBFC and a central pillar of India’s power and infrastructure financing ecosystem. The company now finances the entire power value chain and has strategically diversified into broader infrastructure segments.
Key financing segments include:
This diversification strengthens REC’s growth profile while reducing concentration risk. Supported by sovereign-equivalent credit strength and a robust risk management framework, REC is well positioned to fund India’s long-term capital expenditure cycle.
REC’s recent performance reflects strong execution, improving asset quality, and disciplined balance sheet management. Key Financial Highlights
Metric (H1 FY26) | Performance |
Profit After Tax | ₹8,877 crore (↑ 19% YoY) |
Net Interest Income Growth | ↑ 15% YoY |
Loan Book Size | ₹5.82 lakh crore |
Disbursements | ₹1.15 lakh crore (↑ 27% YoY) |
Gross NPA | 1.06% |
Net NPA | 0.24% |
Provision Coverage Ratio | ~77% |
Balance sheet quality is supported by:
As a result, REC is able to scale its loan book while maintaining financial stability.
REC offers one of the clearest growth roadmaps among financial sector peers. Management has guided towards a ₹10 lakh crore loan book by 2030, with a strong emphasis on renewable energy financing. Key growth drivers include:
With a sanctioned pipeline of ₹2.5 lakh crore and strong disbursement momentum, the company is well placed to deliver on its long-term targets.
REC presents a rare combination of deep value (post recent correction) , stable income, and visible growth. Investment highlights to consider :
While risks such as interest rate movements, execution challenges, and sector cyclicality remain, these factors are well understood and largely reflected in current valuations.
Post euphoria in the stock, the stock has corrected significantly, and is trading close to major support levels now. For REC Ltd, – fundamentals and technicals are also aligning here !
REC Ltd is uniquely positioned at the intersection of India’s energy security, renewable transition, and infrastructure expansion. The company has moved beyond historical asset quality concerns and is now delivering consistent profits, strong cash flows, and a clearly articulated growth strategy. For long-term investors, REC offers:
Given the favourable risk-reward profile, consider adding REC in portfolio at CMP also seems suitable for investors seeking long-term exposure to India’s infrastructure-led growth with stable income characteristics.
Disclaimer: This article is for information purpose only. It is NOT a stock recommendation and should not be treated as such. Please consult your financial advisor before investing. Investing in securities market is subject to market risks. Please read full disclosures here.
Source: nseindia (financial reports and announcements), tradingview
