RECLTD - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | RECLTD | Market Cap | 93,295 Cr. | Current Price | 354 ₹ | High / Low | 432 ₹ |
| Stock P/E | 5.73 | Book Value | 320 ₹ | Dividend Yield | 5.08 % | ROCE | 9.71 % |
| ROE | 20.1 % | Face Value | 10.0 ₹ | DMA 50 | 353 ₹ | DMA 200 | 370 ₹ |
| Chg in FII Hold | -0.67 % | Chg in DII Hold | 0.15 % | PAT Qtr | 3,362 Cr. | PAT Prev Qtr | 4,043 Cr. |
| RSI | 48.3 | MACD | 8.23 | Volume | 96,06,915 | Avg Vol 1Wk | 1,10,94,414 |
| Low price | 304 ₹ | High price | 432 ₹ | PEG Ratio | 0.42 | Debt to equity | 6.11 |
| 52w Index | 39.2 % | Qtr Profit Var | -20.6 % | EPS | 61.8 ₹ | Industry PE | 19.8 |
📊 RECLTD offers strong fundamentals with attractive valuations. It trades at a very low P/E of 5.73 compared to the industry average of 19.8, supported by high ROE (20.1%), stable ROCE (9.71%), and solid EPS (₹61.8). Dividend yield of 5.08% adds steady income. However, high debt-to-equity (6.11) and recent quarterly profit decline (-20.6%) are concerns. The PEG ratio of 0.42 indicates undervaluation relative to growth, making it appealing for long-term investors.
💡 Ideal Entry Price Zone: ₹340 – ₹355 (near DMA 50 and valuation comfort).
⏳ Exit Strategy / Holding Period: Long-term investors can hold for 3–5 years, benefiting from dividends and valuation upside. Partial profit booking is advisable near ₹420–₹430 (recent highs). Stop-loss can be considered around ₹325 to manage downside risk.
✅ Positive
- Attractive P/E (5.73) vs industry average (19.8).
- Strong ROE (20.1%) and stable ROCE (9.71%).
- Dividend yield of 5.08% provides steady income.
- EPS of ₹61.8 reflects solid earnings power.
- DII holdings increased (+0.15%), showing domestic institutional support.
⚠️ Limitation
- High debt-to-equity ratio (6.11).
- Quarterly PAT declined (₹3,362 Cr vs ₹4,043 Cr).
- RSI at 48.3 suggests neutral momentum.
📉 Company Negative News
- Quarterly profit variation -20.6% shows earnings pressure.
- FII holdings reduced (-0.67%).
📈 Company Positive News
- Strong dividend yield supports investor returns.
- MACD positive at 8.23, indicating bullish momentum.
🏭 Industry
- Industry P/E: 19.8, highlighting RECLTD’s attractive valuation.
- Sector supported by infrastructure and power financing demand.
🔎 Conclusion
RECLTD is a fundamentally strong and undervalued stock with high ROE and attractive dividend yield, making it a good candidate for long-term investment. New investors should enter around ₹340–₹355 for valuation comfort. Existing holders can maintain a 3–5 year horizon, with partial profit booking near ₹420–₹430. Monitoring debt levels and quarterly earnings will be key for sustained performance.