REC Shares Dip 4% after the PSU Cut its AUM Growth Guidance to 11-13%

Shares of REC Ltd fell 4% to touch its intraday low on the National Stock Exchange after the company cut its growth guidance for asset under management. During the post-earnings conference call, REC guided for 11-13% growth in AUM compared to the earlier projections of 15-17% growth.

In addition to this, the state-owned company’s management also said that the firm is targeting a loan book of Rs 10 lakh crore by 2030, through an annual loan book growth of 12%. The company aims to achieve zero NPA status in FY26. The infrastructure finance company expects its margins to be in the range of 3.5% to 3.75% going forward.

The company had posted a 21% on-year growth in consolidated revenue for the March quarter and its net profit for the quarter rose nearly 6% compared to the year-ago quarter. An 11% rise in the finance cost during the quarter under review and Rs 776.5 crore of impairment on financial instruments partially offset the on-year increase in revenue.

For the financial year ended March, REC’s consolidated net profit saw an over 12% growth, whereas its revenue for the period has grown nearly 19% over the previous year’s figure. The board of directors had recommended a final dividend of Rs 2.60 per share for FY25. This was in addition to the interim dividends totaling Rs 15.40 per share, declared in four installments throughout the year. 

The board also approved the formation of a 50-50 joint venture between its wholly-owned subsidiary, REC Power Development and Consultancy and BHEL. The joint venture will focus on the development of renewable energy, power, and infrastructure projects.

Currently, the stock is trading just 9% higher than its 52-week low mark that it touched in February this year. On the other hand, REC shares are over 40% below its 52-week high level.