Bernstein revises its forecasts for Power Finance Corporation (PFC) and REC, maintaining an “Outperform” rating but cutting target prices for both. The brokerage lowers PFC’s target to Rs 465 and REC’s to Rs 410, citing reduced expectations for loan-book growth. Bernstein also trims its estimates for FY26–FY28 loan growth to 7%.
The change is attributed to what Bernstein describes as increased competition from banks, which pressures loan growth for power sector lenders. It also points to slower additions of renewable capacity, alongside improving financial health among state-owned distribution companies (DISCOMs), factors that together reduce near-term demand for new financing. NDTV highlights Bernstein’s question about whether investors have fallen into a “value trap,” reflecting the firm’s view that the outlook has become less supportive than previously expected. Other outlets mirror the same central rationale and revised numbers.
Overall, all reports agree that Bernstein’s adjustments focus on competitive dynamics and evolving project and DISCOM fundamentals rather than a change in its fundamental rating stance.
