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RECL

RECNSEI:RECLTD Stock Report

Market Cap

₹301.4b

7D

0.2%

1Y

48.5%

Updated

27 Sep, 2021

Data

Company Financials
RECLTD fundamental analysis
Snowflake Score
Valuation4/6
Future Growth0/6
Past Performance5/6
Financial Health2/6
Dividends4/6

RECLTD Overview

REC Limited, a public financial institution, provides financing services for power generation, transmission, and distribution projects in India.

REC Competitors

Power Finance

NSEI:PFC

₹356.8b

Indian Railway Finance

BSE:543257

₹291.4b

Housing and Urban Development

BSE:540530

₹89.5b

Tourism Finance Corporation of India

BSE:526650

₹5.6b

Price History & Performance

Summary of all time highs, changes and price drops for REC
Historical stock prices
Current Share Price₹151.60
52 Week High₹91.80
52 Week Low₹167.80
Beta0.85
1 Month Change3.62%
3 Month Change6.01%
1 Year Change48.48%
3 Year Change48.63%
5 Year Change22.36%
Change since IPO149.96%

Recent News & Updates

Apr 06
Should You Or Shouldn't You: A Dividend Analysis on REC Limited (NSE:RECLTD)

Should You Or Shouldn't You: A Dividend Analysis on REC Limited (NSE:RECLTD)

Is REC Limited ( NSE:RECLTD ) a good dividend stock? How can we tell? Dividend paying companies with growing earnings...

Shareholder Returns

RECLTDIN Diversified FinancialIN Market
7D0.2%6.2%0.8%
1Y48.5%134.1%67.5%

Return vs Industry: RECLTD underperformed the Indian Diversified Financial industry which returned 134.1% over the past year.

Return vs Market: RECLTD underperformed the Indian Market which returned 67.5% over the past year.

Price Volatility

Is RECLTD's price volatile compared to industry and market?
RECLTD volatility
RECLTD Beta0.85
Industry Beta1.17
Market Beta1

Stable Share Price: RECLTD is less volatile than 75% of Indian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: RECLTD's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1969468Sanjay Malhotrahttps://www.recindia.nic.in

REC Limited, a public financial institution, provides financing services for power generation, transmission, and distribution projects in India. It primarily offers term-loan, medium-term loan, and short-terms loan. The company also acts as a nodal agency for the implementation of Pradhan Mantri Sahaj Bijli Har Ghar Yojana for universal household electrification, Deen Dayal Upadhyaya Gram Jyoti Yojana, National Electricity Fund, Outage Management System, and 11kv Rural Feeder Monitoring Scheme, as well as acts as the bid process coordinator for selection of transmission service provider through tariff based competitive bidding process for independent inter-state and intra-state transmission projects; and provides implementation and consultancy services in power sector.

REC Fundamentals Summary

How do REC's earnings and revenue compare to its market cap?
RECLTD fundamental statistics
Market Cap₹301.37b
Earnings (TTM)₹88.02b
Revenue (TTM)₹151.96b

3.4x

P/E Ratio

2.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
RECLTD income statement (TTM)
Revenue₹151.96b
Cost of Revenue₹1.13b
Gross Profit₹150.83b
Expenses₹62.82b
Earnings₹88.02b

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)44.57
Gross Margin99.26%
Net Profit Margin57.92%
Debt/Equity Ratio811.1%

How did RECLTD perform over the long term?

See historical performance and comparison

Dividends

8.4%

Current Dividend Yield

29%

Payout Ratio

Valuation

Is REC undervalued compared to its fair value and its price relative to the market?

40.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RECLTD (₹151.6) is trading below our estimate of fair value (₹254.45)

Significantly Below Fair Value: RECLTD is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RECLTD is good value based on its PE Ratio (3.4x) compared to the Indian Diversified Financial industry average (15.1x).

PE vs Market: RECLTD is good value based on its PE Ratio (3.4x) compared to the Indian market (20.7x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RECLTD's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RECLTD's PB Ratio (0.7x) is in line with the IN Diversified Financial industry average.


Future Growth

How is REC forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

24.9%

Forecasted Diversified Financials industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as REC has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Past Performance

How has REC performed over the past 5 years?

9.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RECLTD has high quality earnings.

Growing Profit Margin: RECLTD's current net profit margins (57.9%) are higher than last year (44.2%).


Past Earnings Growth Analysis

Earnings Trend: RECLTD's earnings have grown by 9.4% per year over the past 5 years.

Accelerating Growth: RECLTD's earnings growth over the past year (65.8%) exceeds its 5-year average (9.4% per year).

Earnings vs Industry: RECLTD earnings growth over the past year (65.8%) exceeded the Diversified Financial industry 22.5%.


Return on Equity

High ROE: Whilst RECLTD's Return on Equity (20.11%) is high, this metric is skewed due to their high level of debt.


Financial Health

How is REC's financial position?


Financial Position Analysis

Short Term Liabilities: RECLTD's short term assets (₹3,960.0B) exceed its short term liabilities (₹193.9B).

Long Term Liabilities: RECLTD's short term assets (₹3,960.0B) exceed its long term liabilities (₹3,377.2B).


Debt to Equity History and Analysis

Debt Level: RECLTD's debt to equity ratio (811.1%) is considered high.

Reducing Debt: RECLTD's debt to equity ratio has increased from 585.5% to 811.1% over the past 5 years.

Debt Coverage: RECLTD's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if RECLTD's interest payments on its debt are well covered by EBIT.


Balance Sheet


Dividend

What is REC current dividend yield, its reliability and sustainability?

8.38%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RECLTD's dividend (8.38%) is higher than the bottom 25% of dividend payers in the Indian market (0.34%).

High Dividend: RECLTD's dividend (8.38%) is in the top 25% of dividend payers in the Indian market (1.45%)


Stability and Growth of Payments

Stable Dividend: RECLTD's dividend payments have been volatile in the past 10 years.

Growing Dividend: RECLTD's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.5%), RECLTD's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average management tenure


CEO

Sanjay Malhotra (52 yo)

0.83

Tenure

₹1,193,650

Compensation

Mr. Sanjay Malhotra, IAS, serves as Chairman and Managing Director at REC Ltd. since November 9, 2020. Mr. Malhotra was Government Nominee Director at Power Grid Corporation of India Limited since January...


CEO Compensation Analysis

Compensation vs Market: Sanjay's total compensation ($USD16.17K) is below average for companies of similar size in the Indian market ($USD598.36K).

Compensation vs Earnings: Insufficient data to compare Sanjay's compensation with company performance.


Leadership Team

Experienced Management: RECLTD's management team is considered experienced (2.9 years average tenure).


Board Members

Experienced Board: RECLTD's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

REC Limited's employee growth, exchange listings and data sources


Key Information

  • Name: REC Limited
  • Ticker: RECLTD
  • Exchange: NSEI
  • Founded: 1969
  • Industry: Specialized Finance
  • Sector: Diversified Financials
  • Market Cap: ₹301.372b
  • Shares outstanding: 1.97b
  • Website: https://www.recindia.nic.in

Number of Employees


Location

  • REC Limited
  • Plot No. I-4, Sector 29
  • Near IFFCO Chowk Metro Station
  • Gurugram
  • Haryana
  • 122001
  • India

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/27 12:04
End of Day Share Price2021/09/27 00:00
Earnings2021/06/30
Annual Earnings2021/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.