Improving growth prospects powering Power Finance Corp, REC stocks

All analysts polled this month are bullish on the two power financiers and see further gains of 19-20 per cent in the next one year

There’s investment focus on Power Finance Corporation (PFC) and REC with the two power-sector lenders seeing strong credit expansion, as well as improved asset quality with lower defaults and lower credit costs. Future credit demand should be good due to the policy. The Revamped Distribution Sector Scheme (RDSS) will lead to disbursement of Rs 2 trillion -- equally shared by PFC and REC over financial year 2022-23 to 2024-25 (FY23-25). The late payment surcharge (LPS) scheme provides an opportunity of Rs 1 trillion over FY22-24.

For PFC, net interest income (NII) in the first quarter (Q1) for FY24 was Rs