Bernstein Sees 37–41% Upside for PFC, REC Shares

Bernstein is a brokerage that studies companies and their shares.

It believes shares of PFC and REC could rise by about 37% to 41%.

However, both companies have recently faced weaker growth in their lending businesses.

Banks are competing more strongly for power-sector loans.

Renewable-energy projects are also facing transmission limits, while more projects are moving into areas where PFC and REC have less presence.

State electricity companies, called DISCOMs, are becoming financially healthier and may need less borrowing.

Bernstein still thinks the companies have strong asset quality, meaning their loans are generally being repaid well.

But it says investors should watch whether loan growth improves in the next few quarters.