Analysis: REC Limited

Growth thesis

REC is a Maharatna PSU lender financing power sector infrastructure (conventional generation, renewables, transmission), distribution, and non-power infrastructure (ports, metros, roads). It targets 11-12% annual loan growth to reach ₹10 lakh crores by 2030, with renewables growing to 30% (₹3 lakh crores) via PM Surya Ghar (7 lakh households added in 6 months) and 500 GW renewable targets. A ₹2.5 lakh crore order book, 3.5-3.75% NIMs (3.74% in Aug-25), and net-zero NPAs by FY26 (down from 0.82% to 0.24% in 9M FY25) underpin margin stability. Infrastructure expansion (Maharashtra ₹1 trillion MoU) and government-guaranteed projects add visibility. Execution hinges on resolving 11 NCLT assets (₹16,112 crores) and managing RBI’s 2025 provisioning rules, while maintaining cost-of-funds at 7.12%.

Why is REC Limited stock rising?

• Targeting 11-12% loan growth this financial year (FY26) with confidence based on strong first half disbursement trend
• Aiming to become a net zero NPA company by end of FY26 through resolution of stressed assets such as Sinnar and Hiranmaye
• Long-term target of achieving a loan book of Rs 10 lakh crores by 2030, with 30% contribution from the renewable energy sector
• Infrastructure and logistics foray to expand via MoU with Ministry of Shipping and focus on ports, metros, and road transport projects
• Expecting net interest margin (NIM) to remain stable in the range of 3.5% to 3.75% and interest spread between 2.75% and 3.5%

Research report

companyname: REC Limited ticker: RECLTD sector: Power and Infrastructure Finance REC Limited is a Maharatna Central Public Sector Enterprise and one of India's largest Non-Banking Financial Companies. It was established in 1969 to develop power infrastructure in rural areas. Over five decades, its mandate expanded to finance the entire power sector value chain—generation, transmission, distribution, and renewable energy. In 2022, it forayed into non-power infrastructure and logistics. "REC be...

Catalysts

regulatory approval, new product segment, order book surge

Growth guidance

Loan book growth: 11-12% for FY26; ₹10 lakh crores by 2030

Management consistency

consistent