Power Finance Corporation vs REC: Which Stock Should You Track

PFC MCap Rs 1,37,911 Cr, PE 4.10x, ROE 19.49%, D/E 7.62, Div 4.44%. REC MCap Rs 95,665 Cr, PE 5.97x, ROE 19.17%, D/E 6.05, Div 5.11%.

PFC (Power Finance Corporation) vs REC (Rural Electrification Corporation) is one of the most common paired comparisons among PSU finance investors, given that both are government-owned infrastructure NBFCs specialising in lending to the power sector. PFC and REC have a unique relationship — PFC is the parent company that owns a majority stake in REC following the government-mandated merger. Both offer very similar business models, loan books and financial metrics, making this a classic like-for-like comparison.

This Power Finance Corporation vs REC article covers reach and market position, key products, latest declared results and stock valuation. The Power Finance Corporation vs REC data below is sourced from Groww and public company filings and reflects the most recently available information at the time of writing.

Power Finance Corporation vs REC: Reach and Market Position

On the Power Finance Corporation side of the Power Finance Corporation vs REC comparison, PFC lends to state distribution companies (discoms), generation utilities, and private power producers across thermal, hydro and renewable energy. Market capitalisation is Rs 1,37,911 Cr.

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On the REC side of the Power Finance Corporation vs REC comparison, REC lends to state electricity boards, rural electrification projects and private power companies across generation, transmission and distribution segments. Market capitalisation is Rs 95,665 Cr.

Power Finance Corporation vs REC: Key Products and Business Mix

In the Power Finance Corporation vs REC product comparison, Power Finance Corporation offers: PFC earns from interest on long-term power sector loans. EPS is Rs 101.89. P/E is 4.10x, ROE 19.49 percent, D/E 7.62 (high D/E is normal for government infrastructure NBFC). Dividend yield is 4.44 percent.

For REC in this Power Finance Corporation vs REC breakdown: REC earns from interest on power infrastructure loans. EPS is Rs 60.90. P/E is 5.97x, ROE 19.17 percent, D/E 6.05. Dividend yield is 5.11 percent.

Power Finance Corporation vs REC: Latest Results

The Power Finance Corporation vs REC results for Power Finance Corporation: PFC has a market cap of Rs 1,37,911 Cr and P/E of 4.10x. ROE is 19.49 percent. D/E of 7.62 is high but normal for a government NBFC borrowing at sovereign-backed rates. PFC is 1.4 times larger than REC by market cap.

The Power Finance Corporation vs REC results for REC: REC has a market cap of Rs 95,665 Cr and P/E of 5.97x. ROE is 19.17 percent — near-identical to PFC. Dividend yield of 5.11 percent is marginally above PFC.

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Power Finance Corporation vs REC: Stock and Valuation

The Power Finance Corporation vs REC stock comparison uses the latest available market data from Groww. Investors tracking Power Finance Corporation vs REC should verify current prices on NSE or BSE before trading.

PFC vs REC at current valuations: PFC trades at Rs 1,37,911 Cr market cap, P/E 4.10x, ROE 19.49 percent, Div 4.44 percent. REC trades at Rs 95,665 Cr market cap, P/E 5.97x, ROE 19.17 percent, Div 5.11 percent. The two are nearly identical on ROE, loan book quality and business model. REC trades at a slightly higher P/E and offers a slightly higher dividend yield.

Power Finance Corporation vs REC: Quick Comparison Table

The Power Finance Corporation vs REC comparison table below summarises the key metrics covered in this article side by side.

Parameter	Power Finance Corporation	REC
Sector	Power NBFC PSU (parent of REC)	Power NBFC PSU (subsidiary of PFC)
Market Cap	Rs 1,37,911 Cr	Rs 95,665 Cr
P/E Ratio	4.10x	5.97x
ROE	19.49%	19.17%
Debt to Equity	7.62 (govt NBFC, normal)	6.05 (govt NBFC, normal)
Dividend Yield	4.44%	5.11%
Relationship	Parent (owns majority of REC)	Subsidiary of PFC

Conclusion

The Power Finance Corporation vs REC comparison above covers the key data points on reach, products, results and valuation. PFC vs REC is perhaps the most similar comparison in Indian financial services — two government NBFCs with near-identical ROE, loan book composition and risk profiles. PFC owns a majority stake in REC, adding a conglomerate dimension. The key differentiators are size, P/E and dividend yield. Investors reviewing Power Finance Corporation vs REC should check NPA trends in the power sector, discom loan restructuring, and renewable lending growth. Power Finance Corporation vs REC both offer high yields — consult a SEBI-registered advisor for personalised guidance.

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Frequently Asked Questions

Is PFC the parent of REC?

Ans. Yes. Power Finance Corporation (PFC) acquired the government’s majority stake in REC Ltd in 2019, making REC a subsidiary of PFC. Both are separately listed PSUs.

Why are D/E ratios so high for PFC and REC?

Ans. PFC and REC are government-backed NBFCs that raise low-cost bonds and lend to the power sector. High D/E is their structural debt funding model — similar to a bank — and is normal for this type of NBFC.

What is a discom?

Ans. Discom stands for Distribution Company — the state-owned electricity distribution entities that buy power from generators and sell to retail consumers. PFC and REC have large loan exposures to state discoms.

Does REC pay higher dividends than PFC?

Ans. Yes. REC has a slightly higher dividend yield at 5.11 percent versus PFC at 4.44 percent on a trailing twelve month basis.

Are PFC and REC in Nifty 50?

Ans. Neither PFC nor REC is in Nifty 50. Both are in Nifty PSU Bank or Nifty Financial Services indices.

Is investing in PFC and REC diversified?

Ans. Investing in both PFC and REC gives near-identical exposure as they have nearly the same business model, loan book and risk. Many investors treat them as a pair and hold both or just one.

How do power sector NPAs affect PFC and REC?

Ans. PFC and REC have significant loans to state discoms, which have historically been weak credits. Discom financial health and government support for discom debt restructuring are key risk factors for both companies.