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Thursday, May 27, 2010

Stock Report - Rural Electrification Corporation (REC)

Stock market investment research team of Firstcall has come out with a stock report on Rural Electrification Corporation (REC). They have recommended to buy stocks of company for long term investment portfolio.

The stock broking firm has recommended buying stocks of this particular scrip with a target price of Rs 325, in its recent report.

The stock report says, "REC has witnessed huge sanctions in pipeline of Rs 1000 billion. REC management expects a 25% CAGR in loan growth over the next couple of years. It has a well-balanced loan portfolio with lending to highest individual borrower remaining at 7.6% of total portfolio. Borrower Group-wise lending remains high at 12.7% of total loan portfolio."

Market Cap 26893.45
* EPS (TTM) 20.27
* P/E 13.44
* P/C 13.42
* Book Value 84.26
* Price/Book 3.23
Div(%) 45.00%
* Div Yield(%) 1.65
Market Lot 1.00
Face Value 10.00
Industry P/E 13.34

REC has raised Rs 26 billion (13% of post-issue equity) through an FPO in Q4FY10. Post the recent capital issuance, REC is comfortably capitalized with CRAR ratio of 16%. Large capacity addition in the Power sector will drive REC’s business for the generation sector. The share of generation in REC’s loan book will likely to increase 48% by FY12E from 39% in FY10E. We recommend buying stocks in this particular scrip with a target price of Rs 325 for medium to long term investment portfolio.

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