1:3 & 1:1 Bonuses, 2.60% Yield: Maharatna NBFC To Reward Rs 4.5/Share Dividend Soon; BUY For Rs 560 TP

Maharatna NBFC giant, REC Ltd has come up with yet another reward for its investors. REC, which is among the top financiers of the Indian power sector, has declared an interim dividend of Rs 4.5 per share and fixed record date as well. On Wednesday, REC's shares dipped by over 2.5%, however, this brings in an opportunity for buy-on-dips. REC is recommended to buy for the highest target price of Rs 560 per share.

REC Ltd Share Price:

On BSE, at the time of writing, REC share price trading at Rs 418.45 apiece, down by 2.6% with a market cap of Rs 1,10,345.25 crore. The stock was near its intraday low of Rs 415.85 apiece.

The share price's 52-week high and low is at Rs 524 and Rs 113.15 respectively.

In six months, REC shares are up by 65% on BSE, while in a year, the stock rallied by a whopping 261%.

REC Ltd Dividend:

As per the regulatory filing, REC Ltd on March 19 declared a third interim dividend of Rs 4.50 per share having a face value of Rs 10 apiece.

The record date for the upcoming dividend payout is fixed on March 28. REC shares will determine eligible shareholders for receiving the dividends. Only those shareholders will be eligible who hold shares of REC by the end of the record date.

Meanwhile, REC is planning to pay the third interim dividend by April 17, 2024. Earlier, REC paid a first interim dividend of Rs 3.50 (35%) and a second interim dividend of Rs 3 per share (30%) during the nine months of FY24.

In FY23, the company paid dividends up to 126% amounting to Rs 12.6 per share.

On the current market price, REC's dividend yield is around 3.01%.

REC Ltd Bonus Shares:

Apart from dividends, REC has also delivered bonus shares on two occasions in 2016 and 2022.

The first bonus was of a 1:1 ratio, effective from September 28, 2016. The second was a 1:3 bonus ratio, effective from August 17, 2022.

The company has not carried any stock splits as of now.

REC Share Price Target:

At the latest, CLSA recommended Buy on REC Ltd for a target price of Rs 560 per share. The outlook is positive. Taking into consideration the target price, REC shares have the potential for nearly 34% from the current price level.

Also, as per Trendlyne data, the consensus recommendation from 5 analysts for REC Ltd. is BUY. EPS is expected to grow by 24.5% in FY24. The average target price on REC for 1-year is set at Rs 489, indicating a potential upside of 17%.

REC has evolved and expanded its financing mandate to cover the entire Power-Infrastructure sector comprising Generation, Transmission, Distribution, Renewable Energy and new technologies like Electric Vehicles, Battery Storage, Green Hydrogen etc. More recently REC has also diversified into the Non-Power Infrastructure sector comprising Roads & Expressways, Metro Rail, Airports, IT Communication, Social and Commercial Infrastructure (Educational Institutions, Hospitals), Ports and Electro-Mechanical (E&M) works in respect of various other sectors like Steel, Refinery, etc.

REC is a 'Maharatna' company under the administrative control of the Ministry of Power, Government of India, and is registered with RBI as a Non-Banking Finance Company (NBFC), Public Financial Institution (PFI) and Infrastructure Financing Company (IFC).

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, 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.