CLSA upgrades REC, PFC ratings to ‘High perform’ stating strong loan growth, ROE, dividend yield
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Global brokerage firm CLSA has upgraded its ratings on Rural Electrification Corporation (REC) and Power Finance Corporation (PFC) to ‘High Perform’ from ‘Outperform’, citing robust loan growth, strong return on equity (ROE), and attractive dividend yields. The brokerage firm has also set a target price of Rs 525 for both REC and PFC, adjusting from their previous targets of Rs 590 and Rs 540, respectively. CLSA emphasized that asset quality concerns remain minimal, given that lenders are maintaining tight control over project approvals and agreements during the ongoing capex cycle. Despite concerns over process-related slowdowns and sanction delays, CLSA remains optimistic about the mid-teen loan growth outlook over FY26-27 for both companies. REC: High perform| Target price: Rs 525 CLSA highlighted that REC's loan growth over the past 5-7 quarters has been strong, ranging between 15%-21%. The note pointed out that while there have b...