Looking to invest in Indian PSU stocks but torn between Power Finance Corporation (PFC) and REC Limited (RECLTD)? This comprehensive comparison dives deep into their fundamental strengths, technical trends, and business outlook to help you decide which stock fits your portfolio best in 2025.
Fundamental Analysis: PFC vs REC Limited Financial Snapshot
| Key Metric | Power Finance Corporation (PFC) | REC Limited (RECLTD) |
| Revenue Growth | ₹414,099 crore with steady 15.2% CAGR | ₹43,000+ crore, steady growth with ~10-12% CAGR |
| Profit Margins | Healthy 31.2% PAT margin | Strong profit margins around 25-28% |
| EPS Growth | Strong 23.8% YoY growth | Consistent EPS growth, ~15-18% YoY |
| Return on Equity | Robust 19.5% ROE | Healthy ROE around 17-18% |
| Debt-to-Equity | High but improving at 635.3% | Moderate, around 300-350%, reflecting leverage typical for NBFCs in power sector |
| Current Ratio | Strong liquidity position | Adequate liquidity, current ratio ~1.2-1.3 |
| Asset Quality | Improved gross NPA ratio to 1.94%, net NPA 0.39% | Low NPA levels, typically under 2%, showing good asset quality |
| Operating Profit Growth | 39.8% YoY growth in operating profit in Q4 FY25 | Steady operating profit growth aligned with sector trends |
| Dividend | Final dividend ₹2.05/share + interim ₹13.75/share in FY25 | Consistent dividend payouts with attractive yield |
| Other Notes | Net interest income up 41% YoY; government-backed | Strong government ownership, focused on power sector financing |
Fundamental Takeaway: Both PFC and REC Limited are leaders in power sector financing with strong government backing. PFC has a larger scale and higher revenue, while REC Limited maintains solid profitability and asset quality with slightly lower leverage.
Technical Analysis: Price Trends & Market Sentiment
| Time Frame | PFC Stock Movement | REC Limited Stock Movement |
| 1 Month | Uptrend with rising volumes post Q4 results | Moderate uptrend with steady volume |
| 6 Months | Consistent moderate uptrend | Positive trend supported by strong fundamentals |
| 1 Year | Strong positive trend, +26% price increase | Healthy uptrend, price appreciation ~20% |
Key Technical Indicators
- PFC: Trading above 50-day & 200-day moving averages, RSI near 65, bullish MACD crossover, increasing volume.
- REC Limited: Trading above key moving averages, RSI around 60, positive MACD, steady volume growth.
Technical Verdict: Both stocks show bullish momentum, with PFC slightly stronger in volume and price gains, while REC Limited demonstrates steady and consistent technical strength.
Business Outlook: Industry Trends & Growth Potential
Power Finance Corporation (PFC)
- Operates in the power finance sector, critical to India’s infrastructure growth.
- Benefits from government initiatives in renewable energy and power distribution reforms.
- Improving asset quality and strong dividend payouts enhance investor confidence.
- Positioned to capitalize on rising power demand and infrastructure investments.
REC Limited (RECLTD)
- Also a key player in power sector financing, focusing on rural electrification and renewable energy projects.
- Government-backed with a strong mandate to support India’s power infrastructure.
- Steady growth prospects aligned with national energy goals and increasing electricity access.
- Maintaining healthy asset quality and expanding loan book.
Analyst Ratings & Market Sentiment
- PFC: Viewed as a stable, value-driven PSU stock with attractive valuations (P/E ~9) and consistent dividends.
- REC Limited: Positive analyst outlook highlighting steady growth, strong fundamentals, and good dividend yield.
Final Verdict: PFC vs REC Limited – Which PSU Stock Should You Choose?
| Factor | Power Finance Corporation (PFC) | REC Limited (RECLTD) |
| Financial Strength | Larger scale, higher revenue, strong ROE | Solid profitability, good asset quality |
| Technical Outlook | Strong bullish trend, high volumes | Consistent uptrend, steady volume |
| Business Potential | Favorable sector dynamics, government support | Growth aligned with national electrification goals |
| Dividend Yield | Attractive and consistent | Competitive and steady |
| Investment Risk | High leverage but improving | Moderate leverage, steady financials |
Summary: Both PFC and REC Limited are excellent PSU stocks in the power finance sector with strong fundamentals and positive technical trends. If you prefer a larger scale company with slightly higher growth, PFC is your pick. For steady, consistent performance with moderate risk, REC Limited is a solid choice.
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📢 Disclaimer
The information provided in this blog is intended solely for educational and informational purposes. It does not constitute financial advice, stock recommendations, or an offer to buy or sell any securities. Readers are advised to conduct their own research and consult with a qualified financial advisor before making any investment decisions. Please note that stock prices, financial data, and company information mentioned in this article are subject to change on trading days. For the most recent and accurate updates, kindly refer to the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) official websites. Incorporating images can effectively use internal links to enhance user engagement and navigation.
