REC Declares Fourth Interim Dividend of ₹3.60 Per Share

REC Shares Gain Nearly 2% After Dividend Announcement

Shares of Rural Electrification Corporation (REC) Limited surged nearly 2% on March 19, 2025, following the company’s decision to declare a fourth interim dividend of ₹3.60 per share for the financial year 2024-25.

In an exchange filing issued after its board meeting, REC confirmed that March 26, 2025, has been set as the record date for determining shareholder eligibility for the dividend payout. The company further stated that the dividend will be dispatched to eligible shareholders on or before April 16, 2025.

REC’s Interim Dividend

• Dividend Amount: ₹3.60 per share
• Financial Year: 2024-25
• Record Date: March 26, 2025
• Dividend Payout Date: On or before April 16, 2025
• Stock Performance: Gained nearly 2% after the announcement

The announcement has positively impacted investor sentiment, leading to an increase in trading volumes for REC’s stock on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Brokerage Firms Maintain Bullish Outlook on REC Stock

Leading international brokerage CLSA has maintained an ‘outperform’ rating on REC shares, with a target price of ₹590 per share. This projection suggests a potential upside of approximately 38% from the last closing price.

Analysts at Macquarie had also shared an optimistic outlook on REC earlier in March, attributing the stock’s recent volatility to:

• Weak sentiment in PSU (public sector unit) stocks
• Concerns over declining growth and increasing competition
• Market worries about softer power demand

However, the brokerage firm dismissed these concerns as overstated, asserting that India’s power demand is on a recovery path, which is expected to benefit REC and Power Finance Corporation (PFC) in the long run.

REC Stock Performance: A Recovery Amid Market Fluctuations

REC’s stock has undergone significant volatility in the past six months, registering a decline of over 19% during this period. However, in the last month, the stock has witnessed a notable recovery, supported by:

• Renewed investor interest in PSU stocks
• Steady financial performance and dividend payouts
• Growing power demand across India

Market analysts believe that the company’s consistent dividend payouts serve as an indication of strong financial stability and growth prospects, making REC an attractive option for long-term investors.

Growing Power Demand to Drive REC’s Future Growth

A gradual revival in power demand is seen as a major positive factor for REC. Analysts and industry experts suggest that India’s energy consumption is set to increase, driven by multiple factors, including:

• Government-led infrastructure expansion projects
• Higher demand from industrial and commercial sectors
• Rising rural and urban electrification initiatives
• Investments in renewable energy and sustainability

Given that REC is a key lender in India’s power sector, the company stands to benefit from the continued growth in power infrastructure and the government’s focus on energy security.

Dividend Consistency Strengthens REC’s Investment Appeal

The declaration of a fourth interim dividend underscores REC’s commitment to delivering shareholder value. The company has consistently maintained a strong dividend payout policy, which has helped attract investors despite recent stock market uncertainties.

Additionally, REC’s role as a leading financial institution in the power sector ensures steady revenue inflows, positioning it well to sustain future dividend distributions.

India’s Power Sector: Strong Policy Support to Benefit REC

The Indian government’s focus on improving energy access, expanding electricity grids, and boosting renewable energy projects is expected to provide continued momentum for REC’s growth. Key policies that could benefit the company include:

• Higher budgetary allocation for power infrastructure development
• Incentives for renewable energy financing
• Faster approvals for power distribution projects
• Improved financing support for transmission and distribution upgrades

With a solid project pipeline and strong fundamentals, REC remains well-positioned to capitalize on India’s evolving power landscape, ensuring long-term business expansion and sustained investor confidence.