Tough times ahead for PFC, REC

After a weak Q4, the companies could see subdued loan growth and margin compression: Analysts

Stocks of power financiers Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) have risen sharply in the past one year amid expectations of improving growth prospects and improvements in asset quality in the power sector. While PFC has surged 62 per cent, REC has gained 156 per cent in this period, beating the benchmark S&P BSE 100 index (up 20 per cent). However, their performance in the March quarter (Q4) did not match the yearly feat.

Falling interest income impacted the top line growth of the companies in the quarter. Most of this weakness can be attributed to a reversal