REC Ltd. and Power Finance Corporation (PFC) shares fell up to 3% on Thursday. Morgan Stanley downgraded both stocks to Equal-Weight and reduced their target prices.
The brokerage cited concerns over slower loan growth for the revision. Analysts lowered earnings estimates for the 2028 and 2029 fiscal years.
The downgrade precedes a proposed merger between PFC and REC. Both companies faced market pressure prior to this announcement.