Power PSU Stocks to Buy: Amid volatility in the stock market, stocks of power finance companies Power Finance Corporation Ltd (NSE: PFC) and REC Ltd (NSE: RECLTD) are on the rise. A global brokerage has released a report on both these multibagger Power PSU Stocks.
The brokerage says that this sector is ready for mid-teen growth going forward. These stocks will benefit from this.
The brokerage has started coverage on Power Finance Corporation Ltd, and REC Ltd with a buy recommendation. In the past year, both stocks have offered upwards of 150 percent to investors.
The Global Brokerage On PFC, REC
PFC: Buy For ₹670
The global brokerage has started coverage on PFC with a Buy rating. Additionally, the price target per share is 670 rupees. On the 28th of August, 2024 the price of the shares was 539.
This way the stock will give the potential for a substantial return of up to 24 % forward from the present price. Power Finance Corporation Ltd has provided greater than 150% in return to shareholders over the past year.
So far in 2024, the stock has jumped 40 percent. Whereas in 5 years, the stock has shown a jump of about 550 percent.
REC: Buy For ₹ 720
The global brokerage has started coverage on REC Ltd with a Buy rating. Additionally, the target price for shares for the shares is at least 720 rupees.
In 2024, on August 28 the price of shares closed at 618. So the stock can earn the highest yield of 16 percent in comparison to the present price.
REC Ltd has provided over 150 % of its profits to shareholders in the past year. So far in 2024, the stock has jumped 45 percent. Whereas in 5 years, the stock has shown a jump of about 475 percent.
The Global Brokerage’s Opinion On Power Financers
The global brokerage says, 20% of the total loan book of companies comes from infrastructure and renewable. By FY29, 40% of the total loan book will come from infrastructure and renewable.
The target is to double India’s renewable capacity in the next 5 years. Mid-teen loan growth is possible in the sector going forward.
The brokerage says, by FY25-26, it can write back 3000 to 4000 crores. Growth will be supported through government distribution schemes.
An annual capex of 4 lakh crores is possible in the power sector. In this, 1 lakh crore will be spent on renewable and 1.5 lakh crore on transmission and distribution (T&D).
Quick Fact
Power Finance Corporation
| Company name | Power Finance Corporation |
|---|---|
| Brokerage rating | Buy |
| Possible target price | ₹670 |
| Current price (29 Aug 2024) | ₹555 |
| Expected return | 24% |
| 1-year return | Over 150% |
| 2024 year-to-date jump | 40% |
| 5-year growth | About 550% |
| Loan book focus by FY29 | 40% on infrastructure and renewable |
| Sector growth expectation | Mid-teen growth |
| Capex in power sector | ₹4 lakh crore annually |
| Renewable focus | ₹1 lakh crore |
| Transmission and distribution focus | ₹1.5 lakh crore |
REC
| Company name | REC |
|---|---|
| Brokerage rating | Buy |
| Possible target price | ₹720 |
| Current price (29 Aug 2024) | ₹626 |
| Expected return | 16% |
| 1-year return | Over 150% |
| 2024 year-to-date jump | 45% |
| 5-year growth | About 475% |
| Loan book focus by FY29 | 40% on infrastructure and renewable |
| Sector growth expectation | Mid-teen growth |
| Capex in power sector | ₹4 lakh crore annually |
| Renewable focus | ₹1 lakh crore |
| Transmission and distribution focus | ₹1.5 lakh crore |
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