REC Limited
REC Limited demonstrates strong growth in revenue and net profit, coupled with high profitability scores and an attractive dividend yield. However, the company exhibits elevated debt levels and a low current ratio, indicating potential financial leverage considerations. The current valuation suggests a significant margin of safety, despite historical negative free cash flow trends.
Business Performance (CAGR)
Valuation Snapshot
Financial Health
Profitability Metrics
Cash Flow Intelligence
Intrinsic Value
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AI Business Verdict
REC Limited exhibits compelling profitability and growth metrics, coupled with a highly attractive valuation. However, these positive aspects are significantly tempered by elevated debt levels and weak liquidity ratios, which pose considerable financial risks. The company's ability to maintain its growth while addressing these leverage concerns will be crucial for sustained shareholder value creation.
- Strong growth in revenue and net profit (CAGRs of 10.46% and 11.12% respectively).
- High profitability metrics including a 19.30% ROE and 27.36% Net Margin.
- Exceptionally high operating margin of 95.66%.
- Attractive dividend yield of 5.45%.
Balance Sheet
REC Limited has an adequate but tight balance sheet — leverage and liquidity warrant monitoring.
Capacity to fund growth, withstand downturns and return capital.
- REC Limited has an adequate but tight balance sheet — leverage and liquidity warrant monitoring.
- Strong shareholder equity growth
- Efficient working capital cycle
- Elevated debt-to-equity ratio
- Thin interest coverage — cyclical earnings risk
- Tight short-term liquidity cushion
- Large 'other assets' bucket — investigate composition