REC’s Recent Price Movement and Market Context
On 17 Dec 2025, REC Ltd’s share price touched Rs.333.5, the lowest level in the past year. This movement comes despite the Sensex opening positively with a gain of 176.40 points but subsequently retreating by 217.27 points to trade at 84,638.99, a marginal decline of 0.05%. The benchmark index remains close to its 52-week high of 86,159.02, currently about 1.8% below that peak. Notably, the Sensex is trading above its 50-day moving average, which itself is positioned above the 200-day moving average, indicating a generally bullish trend for the broader market.
In contrast, REC’s share price is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a sustained downward momentum in the stock’s price action over multiple timeframes.
Performance Comparison and Valuation Metrics
Over the last 12 months, REC Ltd’s stock has recorded a return of -39.19%, significantly underperforming the Sensex, which has delivered a positive return of 4.86% during the same period. The stock’s 52-week high was Rs.566, highlighting the extent of the decline to the current low.
From a valuation perspective, REC is trading at a price-to-book value of 1.1, which is considered relatively expensive compared to its peers’ historical averages. The company’s return on equity (ROE) stands at 20.7%, reflecting a strong capacity to generate profits from shareholders’ equity. Despite the stock’s price decline, REC’s profits have shown a 16% rise over the past year, indicating underlying earnings growth amid the price weakness.
The company’s price-to-earnings-to-growth (PEG) ratio is 0.3, which suggests that the stock’s valuation relative to its earnings growth is modest. Additionally, REC offers a dividend yield of approximately 5.88% at the current price level, which is considered high within the finance sector.
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Sector and Market Positioning
REC operates within the finance industry and sector, where it faces competition from peers with varying valuations and performance metrics. The stock’s premium valuation relative to peers may reflect market expectations of its long-term fundamentals, despite the recent price weakness.
Institutional investors hold a significant stake in REC, accounting for 33.88% of the shareholding. This level of institutional ownership often indicates a degree of confidence in the company’s fundamentals and governance, given the resources and analytical capabilities these investors typically possess.
Financial Strength and Dividend Profile
REC has demonstrated consistent financial strength, with an average return on equity of 19.88% over the long term. The company has reported positive results for three consecutive quarters, underscoring a stable earnings trajectory despite the stock’s price volatility.
The highest declared dividend per share (DPS) stands at Rs.18.00, with a dividend payout ratio (DPR) of 30.16%, reflecting a balanced approach to rewarding shareholders while retaining earnings for growth. The company’s quarterly profit before depreciation, interest, and taxes (PBDIT) reached a peak of Rs.14,676.57 crore, highlighting robust operational cash flows.
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Recent Price Trends and Sector Performance
The stock’s three-day consecutive decline, resulting in a cumulative return of -2.85%, contrasts with the sector’s overall performance, where REC’s price movement today was in line with sector trends. This suggests that the stock’s recent weakness is partly influenced by broader sectoral factors rather than company-specific events alone.
Despite the price decline, the company’s dividend yield remains attractive at 5.88%, which may appeal to income-focused investors within the finance sector. However, the stock’s trading below all major moving averages indicates a cautious market stance towards REC’s near-term price momentum.
Summary of Key Metrics
To summarise, REC Ltd’s current share price of Rs.333.5 represents a 52-week low, with a year-to-date return of -39.19%. The company maintains a strong ROE of 20.7% and a high dividend yield of 5.88%. Institutional investors hold a significant stake of 33.88%, and the company has reported positive quarterly results for three consecutive periods. The stock’s valuation at a price-to-book ratio of 1.1 is above peer averages, while profits have shown a 16% rise over the past year.
These factors collectively illustrate a complex picture where REC’s underlying fundamentals remain robust, yet the stock price reflects market caution amid sectoral and broader market dynamics.
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