CLSA sees 17% upside in REC; stock jumps over 7%

State-owned REC Ltd shares soared over 7 per cent in morning deals on Wednesday (January 24, 2024) after global brokerage CLSA gave a 17 per cent upside target from Tuesday's closing price. 

As of 10:19 a.m., shares of REC Ltd traded 7.53 per cent or Rs 32.7 higher on BSE at Rs 467.05 apiece. The market capitalisation of the company at around the same time stood at Rs 1,22,984.73 crore.

CLSA continued with a 'buy' call on the stocks and gave a target price of Rs 510 apiece.

On Tuesday, during market hours, the company announced its third-quarter results that ended December 31, where the company posted about a 13.5 per cent rise in its consolidated net profit to Rs 3,308.42 crore for the December 2023 quarter, mainly on the back of higher revenues.

Its consolidated net profit was Rs 2,915.33 crore in the quarter ended December 2022, a BSE filing showed. The total income rose to Rs 12,071.54 crore in the quarter from Rs 9,795.47 crore in the same period a year ago.

The board, in its meeting on Tuesday, also approved the incorporation of a project-specific special purpose vehicle as a wholly owned subsidiary of REC Power Development & Consultancy Limited (a wholly owned subsidiary of REC Ltd) for the selection of a successful bidder as Transmission Service Provider (TSP) for Eastern Region Expansion Scheme- XXXIX project allocated by the Ministry of Power through a tariff-based competitive bidding process.

Besides, it also approved the sale and transfer of the entire shareholding of six subsidiaries (power transmission projects), presently held by REC Power Development and Consultancy Limited (RECPDCL), to the successful bidders selected through a tariff-based competitive bidding process.

REC share price: Past performance

In a year, the stock of REC Ltd has gained over 281 per cent, outperforming the Nifty 50's rise of over 19 per cent. 

(With inputs from agencies.)

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