Graham Number Flags Deep Value in PFC, REC

Graham Number Screen Flags Deep Value in PFC and REC The Graham Number doesn't lie. It can mislead, but it doesn't lie. When a stock trades at a 47.2% margin of safety relative to its Graham Number, the arithmetic is screaming value. When two stocks do it simultaneously, in the same sector, with P/E ratios below 6, you don't ignore it. You ask why the market is so certain these names are cheap for good reason. [Power Finance Corporation](/stock/PFC) (NSE: PFC) and [REC Ltd](/stock/RECLTD) (NSE: RECLTD) are sitting at exactly that juncture right now. Both trade at roughly 47.2% below their Graham Numbers, the classic Benjamin Graham metric derived from earnings per share and book value per share. Both carry single-digit P/E multiples. And both post Piotroski-equivalent fundamental scores in the high 70s to low 80s, which is the range associated with companies improving, not deteriorating, across profitability, debt load, and operating efficiency dimensions. So the uncomfortable question isn't whether these stocks are cheap. They clearly are, by multiple measures. The question is whether the market knows something that the numbers don't. Why the Discount Exists — and Whether It's Earned The standard bear case on PFC and RECLTD rests on asset quality anxiety. Both are government-owned non-banking financial companies that lend almost exclusively to the power sector: state distribution companies, generation projects, transmission infrastructure. The discom debt problem in India is well-documented. State electricity boards have carried structural losses for years, and any lender with concentrated exposure to that segment carries headline risk even when actual NPAs remain contained. But here's what the bears need to reconcile with: PFC's gross NPA ratio was approximately 3.6% as of Q3 FY25, and RECLTD's was in a comparable range. These are not the numbers of a lender in distress. Provision coverage has improved. Loan book growth has stayed in the 15-18% band. Both co...