New Delhi. India's leading brokerage firm Macquarie has expressed its confidence in 2 major government financial companies - Power Finance Corporation (PFC) and REC Limited. Giving an 'outperform' rating to these companies, Macquarie has said that the shares of PFC and REC can see a potential gain of up to 34% and 28% respectively. Both these companies are listed in the BSE 100 index and provide financial support to the power sector, where government support and policy reforms have a direct impact on their financial position.

Macquarie said in its report that the financial performance of these companies is improving, which has been possible due to regulatory reforms, reduction in credit risk, and increasing renewable mix in the industry. The firm believes that despite the rise in the shares of these companies in the recent past, lower slippage, asset resolution, and further stable growth may enable their stock price to get further ratings.

REC Limited Share Price Target 2024
According to Macquarie, REC Limited has the potential to achieve 15% AUM growth CAGR and 20-21% ROE from FY 2024 to 2027. Based on this estimate, the firm has set a price target of Rs 660 for REC shares. On Tuesday, the stock closed at Rs 514.50 on the BSE. Last year, REC recorded a 52-week high of Rs 653.90 for its stock. Analysts believe that REC could benefit from growing renewable energy projects in the market and rising demand in the power sector.

PFC as the promoter of REC holds a 52.63% stake in the company, making both the companies interrelated, making them not only competitors but also synergists. The interrelationship between the two companies can help boost their combined profits.

PFC share price target 2024
Macquarie has also given an 'outperform' rating to Power Finance Corporation (PFC) and has set its share price target at Rs 630, which is 34 percent higher than the current level. On Tuesday, the stock closed at Rs 466.85 on the BSE. Macquarie said that PFC has a better risk-reward ratio than REC.

Macquarie has said that the reforms and government schemes launched by the Government of India for the power sector in recent years have boosted the growth of these companies. Macquarie believes that as the power sector continues to improve and the share of renewable energy continues to increase, both these companies will be able to meet their financial targets.