Multibagger Stocks: PFC and REC Shares Surge After Morgan Stanley’s Bullish Outlook, See Up to 23% Upside

Shares of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) jumped on Thursday after global brokerage firm Morgan Stanley gave both state-owned companies a positive outlook. The brokerage started coverage on the stocks with an 'Overweight' rating and sees strong growth ahead.

PFC Share Price Today

NSE: PFC; As of 1:28 PM on 10 July, shares of Power Finance Corporation Ltd were trading at Rs 432.10, marking a gain of Rs 14.35 or 3.44% for the day.

As of the latest trading session, Power Finance Corporation opened at Rs 425.75, reached an intraday high of Rs 432.45, and dipped to a low of Rs 422.30. Over the past 52 weeks, the stock has traded between a low of Rs 357.25 and a high of Rs 580.00.

REC Share Price Today

NSE: RECLTD; As of 1:39 PM on 10 July, shares of REC Limited were trading at Rs 397.15, up by Rs 5.60 or 1.43% on the day. The stock opened at Rs 398.00, reached an intraday high of Rs 401.45 and hit a low of Rs 395.00. Over the past 52 weeks, REC has swung between a low of Rs 357.35 and a high of Rs 654.00.

Morgan Stanley's Recommendation on PFC and REC Stocks: Check Target Price and Expectations

Morgan Stanley set a target price of Rs 508 for PFC, suggesting a 10% upside from Wednesday's closing price. For REC, it gave a target of Rs 485 per share, indicating a potential 23% rise. Following this news, both stocks gained on Dalal Street.

The brokerage believes PFC and REC are well-positioned to grow their loan books by about 12% each year between financial years 2025 and 2028. This growth is expected to come from strong lending in areas like renewable energy, thermal power projects, transmission systems, and power distribution networks.

Morgan Stanley also expects the return on equity for both companies to remain strong at around 17%-19%. This outlook is supported by stable profit margins, good asset quality, and low bad loans. The report also noted that both stocks are trading at low valuations-just 5 to 6 times their expected earnings for FY27-making them appealing for long-term investors.

Another plus point is their high dividend yields, which are between 3.8% and 4.5%. The companies are also showing signs of reducing debt and improving how they manage their assets and liabilities. Overall, Morgan Stanley sees a strong risk-reward ratio for investors looking at these power financing stocks.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.