REC, PFC Trade at 47% Graham Discount With Strong Scores

REC and PFC Are Flashing a Rare Value Signal The Graham Number doesn't lie, but it does demand context. Right now, [REC Ltd](/stock/RECLTD) (NSE: RECLTD) trades at ₹335 against a Graham Number of ₹662, a gap of roughly 49%. [Power Finance Corporation](/stock/PFC) (NSE: PFC) sits at ₹376 versus ₹783, a discount of about 52%. These aren't marginal gaps. Benjamin Graham himself considered anything above 33% a meaningful margin of safety. Both stocks are sitting nearly 20 percentage points above that threshold. The Graham Number is calculated from earnings per share and book value per share. It's a ceiling, the highest price a conservative investor should theoretically pay. When a stock trades at half that ceiling, the market is either pricing in serious long-term risk or has simply undervalued the business. In the case of two government-backed infrastructure lenders with FairStock Scores in the mid-to-high 70s, the latter seems worth investigating. Both companies carry single-digit price-to-earnings ratios, which is unusual for businesses growing their loan books at double-digit rates. That combination, wide Graham discount plus reasonable quality scores plus low P/E, doesn't show up often in a single screen. When it does, it's worth asking why. What the Financials Actually Show REC Ltd reported a net profit of ₹14,070 crore for FY24, up from ₹11,604 crore the previous year, roughly 21% growth year-on-year. Its loan book crossed ₹5.1 lakh crore, with renewable energy financing now accounting for a growing share of disbursements. Net interest margin has held relatively steady, and gross NPAs remain below 1%, a number that would make most private sector banks envious. PFC's numbers tell a similar story. Net profit for FY24 came in at ₹23,217 crore, supported by a loan book that crossed ₹9.5 lakh crore. Asset quality has improved materially over the past three years following the resolution of several large stressed power sector accounts. Both companies benefit from...