In an unpredictable market where stocks can fluctuate wildly, certain companies consistently capture investors’ interest. Notably, two government-backed financial powerhouses are at the forefront of India’s energy sector ambitions: Power Finance Corporation (PFC) and REC. As these firms prepare to unveil their financial results for Q4 FY25, potential investors are left pondering: which stock should take precedence in their portfolios? Here are four essential points to consider.

PFC vs. REC: Analyzing Stock Performance

When it comes to stock performance, both PFC and REC have had their ups and downs, but recent trends reveal a mixed picture.

• Power Finance Corporation (PFC) has shown a 7% return over the past week and a 5% gain in the last month. However, it has experienced a 10% decline over the past six months and is down 6% year-to-date in 2025. Yet, on an annual basis, PFC has managed to post a 7% increase. Its share price has fluctuated between Rs 357.25 and Rs 580, with a total market capitalization of Rs 1.40 lakh crore.

• In contrast, REC has displayed more volatility in its stock movements. The company recorded a 9% increase in the last week, but only a slight 1% rise in the last month. Over the past six months, REC’s share price has plummeted by 22% and has seen a marginal 0.2% decrease over the last year. Its share price range for the past 52 weeks has been between Rs 357.35 and Rs 654.

PFC vs. REC: Dividend Distribution Insights

Both companies have been proactive in rewarding their shareholders with dividends.

• PFC has declared four interim dividends in FY25, each valued at Rs 3.50, except for one, which was Rs 3.25. Additionally, a final dividend of Rs 2.50 for FY24 was also announced.

• On the other hand, REC has matched this effort by announcing four interim dividends in FY25, with amounts of Rs 3.50, Rs 4, Rs 4.30, and Rs 3.60 per share.

PFC vs. REC: Q3 FY25 Earnings Highlights

Examining the recent earnings reports sheds light on the financial health of both corporations.

• Power Finance Corporation reported a net profit of Rs 7,759.56 crore, reflecting a robust 23% year-on-year increase. Revenue rose 14% to Rs 26,798.04 crore, while net interest income reached Rs 4,694 crore. PFC’s asset quality is commendable, with gross non-performing assets (NPA) improving to 2.68% and net NPA at 0.71%. However, loan growth lagged slightly behind expectations, achieving 10% YoY compared to a target of 14%.

• Meanwhile, REC reported a net profit of Rs 4,076.35 crore, also marking a 23% increase YoY. Total income surged by 18.4% to Rs 14,286.91 crore, with earnings per share (EPS) reaching Rs 15.50. The profit before tax stood at Rs 5,180.97 crore, showcasing the company’s ability to maintain profitability despite rising expenses.

PFC vs. REC: Company Overviews

Power Finance Corporation (PFC), established in 1986, is a Maharatna public sector enterprise and the largest non-banking financial company in India’s power sector. PFC finances roughly 23% of the country’s installed power generation capacity, providing loans across various segments including generation, transmission, and distribution. The organization also plays a pivotal role as the nodal agency for major power reforms like Ultra Mega Power Projects (UMPP) and Restructured Accelerated Power Development and Reform Program (R-APDRP).

Conversely, REC, while smaller, focuses significantly on rural electrification and renewable energy initiatives. The company has established a robust presence in infrastructure development, particularly in areas that lack adequate service.

As investors weigh their options, both PFC and REC present unique advantages and challenges in the dynamic landscape of Indian finance.