Buy REC; target of Rs 315: Firstcall Research

Firstcall Research's report on Rural Electrification Corporation (REC)

"In 4th quarter of FY15, the company’s total income (including other income) registered 19.62% up y-o-y to Rs. 53707.60 million from Rs. 44900.00 million in 4th quarter of FY14. During Q4 FY15, net profit of the company stood at Rs. 10965.00 million against Rs. 11917.00 million over corresponding quarter of previous year. Operating profit or EBIDTA of the company ramps up by 11.27% from Rs. 42720.90 million in Q4 FY14 to Rs. 47534.90 million in Q4 FY15. In the same quarter, Profit before tax (PBT) of the company increased by 0.69% yo-y and stood at Rs. 16590.40 million compared to Rs. 16477.00 million in corresponding quarter of previous year."

"The company strives to sustain and maintain consistent growth rate and surge ahead to attain still greater heights of performance to match the expectations of all its stakeholders. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. Over 2014-2017E, we expect the company to post a CAGR of 17% in its top-line and 13% in its bottom-line respectively. Hence, we recommend buy for the stock with a target price of Rs 315 on the stock", says Firstcall Research Report.

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