Wanted to put some more thoughts on why picked REC.
Power and Infra is going to be the extremely important over next 5 years.
India is estimated to spend at least 7 lakh crores across on power-renewable+thermal+nuclear and distribution.
So REC wants to grow loan book from $62 billion to $ 130 Billion in 6 years. that puts it at CAGR of roughly 14-15%.
Using green bonds and overseas borrowings to reduce cost of funds. Improvement in NIM and final spread.
So it will be story of scale. Non POwer Infra loans will get better pricing and NIM’s.
The cake has been eaten in the last one year since price has tripled. However i beleive there is room here for a solid 10-15% + dividends type of growth.
At portfolio level this year I have pursued and now Continuing to keep a barbell type of PF with highly risky investments in Wockpharma and HCC and a more solid companies in Tata consumer and REC/GAIL.
Will keep adding this year based on SIP.
I will be happy if I can pencil in 15% CAGR at pf level over next few years considering the good returns last few years.
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