Shares of Power Finance Corp. and Rural Electrification Corp. gained after Morgan Stanley initiated coverage with an ‘overweight’ rating. PFC’s share price increased by nearly 3%, while REC’s share price rose by 2.58%.
Morgan Stanley’s report highlighted that both PFC and REC are expected to achieve an estimated 12% compound annual growth rate in loans from fiscals 2025 to 2028, with an average return on investment of 17-19%.
The brokerage firm also noted that the risk-reward profile was attractive, with a projected price-to-earnings ratio of 5-6 times for fiscal 2027, supporting sustainable low-to-mid teens loan growth and a dividend yield of 3.8-4.5%.
PFC stock pared gains to trade 1.80% higher at Rs 425.25 and REC share price pared gains to trade 1.47% up at Rs 397.30.
