PFC, REC Trade 47% Below Graham Number

I’ll admit, I had to refresh the screen when I saw PFC and REC trade 47% below Graham Number on August 19, 2026. [Power Finance Corporation](/stock/PFC) (NSE: PFC) at ₹376.00 with a Graham Number of ₹783.23. [REC Ltd](/stock/RECLTD) (NSE: RECLTD) at ₹335.00 against ₹662.26. A P/E of 4.76 for PFC and 5.51 for REC. These are not tiny, illiquid micro-caps. They are the two largest state-owned power financiers in India, sitting at discounts that would make a 1950s value investor spill coffee on his newspaper. I have been around Indian equities long enough to know a discount this wide usually means the market sees something broken. For PFC and REC, I suspect it’s a mix of neglect and regulatory fear. The market has never fully trusted state-owned financiers, and recent regulatory shifts around infrastructure project financing have given investors another reason to stay away. Why PFC and REC Trade 47% Below Graham Number The Graham Number is a blunt tool. It multiplies earnings per share and book value per share, applies the 22.5 constant, then takes the square root. It does not capture franchise quality, cost of funds, or regulatory risk. But when a stock trades at roughly half that number, the question is not whether the formula is perfect. The question is whether the market has overcorrected. For PFC, a ₹783.23 Graham Number against a ₹376 price means the market is pricing in either a sharp drop in book value or a sharp drop in earnings. The same holds for REC, whose ₹662.26 Graham Number compares with a ₹335 price. Both carry FairStock Scores above 70, with PFC at 77 and REC at 76. That score does not make them risk-free, but it tells me the underlying fundamentals are not broken. Market and sector impact: PFC and RECLTD The power financing sector has been in a strange spot. India’s electricity demand keeps growing, and the push toward renewable capacity means more project lending, not less. That should benefit [Power Finance Corporation](/stock/PFC) and [REC Lt...