PFC and REc among top losers
REC and Power Finance Corporation are currently among the top five losers on the BSE on Thursday, 20 August 2026. REC fell 2.48% to Rs. 329, against its previous close of Rs. 337.35, while PFC declined 2.78% to Rs. 365.55, against its previous close of Rs. 376. Market depth was weak for both counters, with REC showing sell quantity of 2,40,985 against buy quantity of 1,55,472, and PFC showing sell quantity of 2,74,678 against buy quantity of 1,76,283.
Trigger
- Brokerage downgrades and earnings estimate cuts.
- Morgan Stanley reportedly cut earnings estimates, pointing to only gradual recovery.
- Mixed Q1 performance raised concerns over margins and loan growth.
- CLSA and Motilal Oswal also trimmed target prices after recent results.
- Merger-related caution continues around the proposed REC-PFC consolidation.
- Approved share-swap ratio: 88 PFC shares for every 100 REC shares.
The selling pressure appears more sentiment-driven than valuation-driven. Both stocks still trade at low valuation multiples, REC at around 5.4x consolidated PE and PFC at around 3.6x consolidated PE but the market is focusing on softer growth visibility, possible margin compression and slower loan book expansion after a strong run in power financiers.
The merger angle is also weighing on near-term trading behaviour. While the REC-PFC merger may eventually create a larger power-financing institution with scale benefits, investors are currently pricing in uncertainty around integration, swap-ratio implications and whether the combined entity can sustain return ratios without sacrificing growth quality.