NSEI:RECLTD

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Good value average dividend payer.


Similar Companies

Share Price & News

How has REC's share price performed over time and what events caused price changes?


Latest Share Price and Events

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.


Market Performance


7 Day Return

0.4%

RECLTD

2.1%

IN Diversified Financial

2.0%

IN Market


1 Year Return

3.1%

RECLTD

-3.3%

IN Diversified Financial

17.7%

IN Market

Return vs Industry: RECLTD exceeded the Indian Diversified Financial industry which returned -3.3% over the past year.

Return vs Market: RECLTD underperformed the Indian Market which returned 17.7% over the past year.


Shareholder returns

RECLTDIndustryMarket
7 Day0.4%2.1%2.0%
30 Day2.9%5.1%7.0%
90 Day54.7%42.5%26.0%
1 Year17.2%3.1%0.5%-3.3%19.8%17.7%
3 Year22.1%-7.1%-22.2%-27.4%11.9%6.5%
5 Year143.3%58.4%93.7%66.3%88.7%74.4%

Long-Term Price Volatility Vs. Market

How volatile is REC's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

29.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RECLTD (₹145.4) is trading below our estimate of fair value (₹206.32)

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 (4.6x) compared to the IN Diversified Financial industry average (13.7x).

PE vs Market: RECLTD is good value based on its PE Ratio (4.6x) compared to the Indian market (19.6x).


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 is overvalued based on its PB Ratio (0.7x) compared to the IN Diversified Financial industry average (0.6x).


Next Steps

Future Growth

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

26.0%

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.


Next Steps

Past Performance

How has REC performed over the past 5 years?

-0.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RECLTD has high quality earnings.

Growing Profit Margin: RECLTD's current net profit margins (49.5%) are lower than last year (61.4%).


Past Earnings Growth Analysis

Earnings Trend: RECLTD's earnings have declined by 0.6% per year over the past 5 years.

Accelerating Growth: RECLTD's earnings growth over the past year (15.1%) exceeds its 5-year average (-0.6% per year).

Earnings vs Industry: RECLTD earnings growth over the past year (15.1%) exceeded the Diversified Financial industry -2.9%.


Return on Equity

High ROE: RECLTD's Return on Equity (15.2%) is considered low.


Next Steps

Financial Health

How is REC's financial position?


Financial Position Analysis

Short Term Liabilities: RECLTD's short term assets (₹3,439.6B) exceed its short term liabilities (₹20.0B).

Long Term Liabilities: RECLTD's short term assets (₹3,439.6B) exceed its long term liabilities (₹3,289.6B).


Debt to Equity History and Analysis

Debt Level: RECLTD's debt to equity ratio (813.3%) is considered high.

Reducing Debt: RECLTD's debt to equity ratio has increased from 593.4% to 813.3% 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


Next Steps

Dividend

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

8.25%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: RECLTD's dividend (8.25%) is higher than the bottom 25% of dividend payers in the Indian market (0.43%).

High Dividend: RECLTD's dividend (8.25%) is in the top 25% of dividend payers in the Indian market (1.8%)


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 reasonable payout ratio (54.3%), RECLTD's dividend payments are 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?

0.6yrs

Average management tenure


CEO

Sanjay Malhotra (52 yo)

0.17

Tenure

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 ...


Leadership Team

NamePositionTenureCompensationOwnership
Sanjeev Gupta
Director of Technical5.25yrs₹9.29mno data
Jyoti Amitabh
Executive Directorno data₹7.19mno data
Sanjay Malhotra
Chairman & MD0.17yrno datano data
Ajoy Choudhary
Director of Finance0.58yrno data0.000010%
₹ 28.3k
Daljeet Khatri
Chief General Manager of Finance & Accountsno datano datano data
Ashok Awasthi
Executive Director of Administration & Estateno datano datano data
S. Batta
Executive Director of Lawno datano datano data
Kalpana Kaul
Executive Director of HR & CCno datano datano data
Vijay Arora
Chief Risk Officer0.58yrno datano data
Sunita Singh
Chief Vigilance Officer3.83yrsno datano data
S. Gaikward
Executive Director of Project Monitoring Divisionno datano datano data
Salil Kumar
General Manager of Vigilanceno datano datano data

0.6yrs

Average Tenure

59yo

Average Age

Experienced Management: RECLTD's management team is not considered experienced ( 0.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Sanjay Malhotra
Chairman & MD0.17yrno datano data
Praveen Singh
Nominee Director1.58yrs₹180.00k0%
₹ 0
Mritunjay Narayan
Government Nominee Director1.33yrsno datano data

1.3yrs

Average Tenure

52yo

Average Age

Experienced Board: RECLTD's board of directors are not considered experienced ( 1.3 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 company bio, 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: ₹283.499b
  • Shares outstanding: 1.97b
  • Website: https://www.recindia.nic.in

Number of Employees


Location

  • REC Limited
  • Core-4
  • SCOPE Complex
  • New Delhi
  • Delhi
  • 110003
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
532955BSE (Mumbai Stock Exchange)YesEquity SharesININRMar 2008
RECLTDNSEI (National Stock Exchange of India)YesEquity SharesININRMar 2008

Biography

REC Limited, a public financial institution, provides financing services for power generation, transmission, and distribution projects in India. It primarily offers long-term, medium-term, and short-terms ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/15 12:15
End of Day Share Price2021/01/15 00:00
Earnings2020/09/30
Annual Earnings2020/03/31


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.