Elara Securities sets record target prices on multibagger PSU stocks PFC and RECL; here's why
Also Read: 11 power stocks including Adani Green Energy, NHPC gained between 20% and 110% in 3 months; check full list Going forward, the sharp bull run in PFC and RECL is likely to continue as per the projections made by domestic brokerage firm Elara Securities. The brokerage has identified the following four key growth levers for power financiers: 1] Renewed interest in thermal capacity addition following the Government of India's announcement regarding the addition of 80 GW and the emphasis on grid stability.
2] Government initiatives such as the Renewable Energy Development and Solar Scheme (RDSS), along with LPS schemes, are expected to drive funding opportunities in the power sector. 3] Robust funding potential for renewable energy projects worth ₹26 trillion during FY22–32, including opportunities in rooftop solar financing, estimated at ₹12 trillion.
4] Increasing infrastructure credit uptake due to the availability of assets like airports, roads, data centres, and electric vehicle charging stations, along with a strong order book across firms. Also Read: As India expands its nuclear power capacity, these four companies are at forefront Additionally, a promising pipeline of sanctions for renewable and infrastructure projects, coupled with a gradual increase in thermal project sanctions until emerging technologies mature, is expected to further drive growth, the brokerage added.
Therefore, it expects a 15–16% loan CAGR for Power Finance Corporation and 17–18% for Rural Electrification Corporation during FY23–26E. The brokerage said that both PFC and RECL stand poised to sustain NIM at 3.5% during FY24–26E, underscored by a three-year transmission lag, an increased share of fixed rate borrowings curtailing the
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