Each PFC and REC have been downgraded by Morgan Stanley to “equalweight” from their earlier score of “obese”. Whereas the worth goal for REC has been reduce to ₹360 from ₹430 earlier, the goal for PFC was reduce to ₹410 from ₹510 earlier.
The revised worth goal for REC implies an upside potential of 8% from present ranges, for PFC, it signifies an upside potential of 9.3% from Wednesday’s closing ranges.
That is the primary downgrade for PFC, which was a “consensus purchase” amongst all 15 analysts who lined it.
In its word on Thursday, Morgan Stanley stated that the mortgage progress for each REC And PFC has moderated sharply, whereas on the flip aspect, the system and financial institution credit score to the ability sector has accelerated.
For the June quarter, PFC’s mortgage progress stood at solely 4% from final yr, whereas that determine for REC fell to only one%.
The brokerage additional stated that the expansion disconnect for the 2 corporations has been a lot better than they’d anticipated.
Any potential restoration for each REC and PFC from hereon, will solely be gradual, in accordance with Morgan Stanley, who, because of this, has additionally reduce its earnings estimates for each these corporations.14 analysts cowl REC as nicely, of whom 10 have a “purchase” score and 4 others have a “maintain” suggestion on the inventory. It nonetheless doesn’t have any “promote” score from the analysts that cowl the inventory.
The consensus estimates of worth targets amongst analysts point out a 32% upside for PFC, whereas for REC, the upside potential is 29%.
Shares of PFC are buying and selling 1.7% decrease on Thursday after the downgrade at ₹368.25. The inventory is now up only one.4% thus far for the yr.
Shares of REC are buying and selling 1.5% decrease on Thursday at ₹332. The inventory is now down 10% this yr.
