REC shares hit lower circuit, tumble 11% from record high; buy, sell or hold?
REC shares hit lower circuit, tumble 11% from record high; buy, sell or hold?
Shares of REC slipped over 11% from record high in early deals on Monday amid a rally in the broader markets. REC stock, which touched a record high of Rs 539.85 on May 3 slipped to Rs 501.90 today, losing 11.48% during the period. REC shares hit the lower circuit of 10% to Rs 501.90 on BSE today. Market cap of the firm fell to Rs 1.32 lakh crore. REC Limited stock opened lower at Rs 531.10 today.
In terms of technicals, the relative strength index (RSI) of REC stands at 79.2, signaling it’s trading in the overbought territory. REC shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The large cap stock has gained 279 per cent in a year and gained 445 per cent in two years.
Total 12.32 lakh shares of the firm changed hands amounting to a turnover of Rs 63.86 crore on BSE. The stock hit a 52-week low of Rs 127.40 on May 19, 2023.
Brokerage CLSA has maintained its ‘buy’ call on the stock with a revised target of Rs 595 against Rs 560. CLSA said the growth outlook of REC Ltd was strong.
The company performed well in FY24. Improvement in ratings helped in credit costs. The loan growth for the next 3-4 years is expected to rise at an average rate (CAGR) of 18 per cent.
Elara Capital has assigned a targte price of Rs 604 on the stock.
“REC dream valuation run may continue underscoring the NPA downcycle, strong growth visibility (thermal back in reckoning, renewables upturn) & stable NIM led by effective liability management. We expect a 19% ROE and 2.7% ROA baking in write-backs and factoring in NIM of 3.6% during FY25-26E. We retain Buy and raise our target price to Rs 604 from Rs 582 on 1.9x (unchanged) on FY26E P/ABV,” said Elara Capital.
The PSU reported a 33.84 per cent year-on-year (YoY) rise in its net profit at Rs 4,016.30 crore in the March quarter compared with Rs 3,000.91 crore in the same quarter last year.
Total income climbed 24.89 per cent to Rs 12,643.31 crore in Q4 compared with Rs 10,123.96 crore in the corresponding quarter last year.
REC announced a final dividend of Rs 5 per share, subject to approval of shareholders in the ensuing Annual General Meeting (AGM).
For the year ended March 31, 2024, the company reported a 26.82% rise in its net profit at Rs 14,019.21 crore as compared to Rs 11,054.64 crore for the previous year. Total income of the company increased by 20.28% at Rs 47,214.15 crore for year under review as compared to Rs 39,252.73 crore for year ended March 31, 2023.
Watch Live TV in English
Watch Live TV in Hindi