Angel One's Osho Krishan Recommends REC and GMDC for February 2026 Growth as PSU Stocks Lead Market Rally

Breaking: Angel One's Osho Krishan Recommends REC and GMDC for February 2026 Growth as PSU Stocks Lead Market Rally

The Indian equity market is currently experiencing a robust uptrend, with Public Sector Undertakings (PSUs) emerging as key drivers of investor interest. Amidst this positive sentiment, Osho Krishan, Senior Analyst, Technical & Derivatives at Angel One, has issued a compelling "Buy" recommendation for two prominent PSU stocks: REC Ltd and Gujarat Mineral Development Corporation Ltd (GMDC), signaling potential for strong near-term gains in February 2026. This comes as the Nifty 50 approaches the 26,000 mark, fueled by optimistic earnings outlooks and consistent domestic institutional investor (DII) inflows.

The Catalyst

Osho Krishan's recommendation on February 5, 2026, highlighted strong technical indicators for both REC and GMDC, suggesting favorable risk-reward profiles for investors. REC Ltd, a Maharatna Central Public Sector Enterprise, has shown decent buying traction and a strong rebound from oversold parameters, reinstating buying momentum. Similarly, GMDC Ltd, a state-owned mining giant, has demonstrated a rebound from its 100-Day Exponential Moving Average (DEMA) and a positive crossover in the MACD histogram, hinting at a potential breakthrough into uncharted territory.

These specific stock calls align perfectly with broader market trends in February 2026. The Indian power sector, where REC plays a pivotal financing role, is undergoing a significant transition towards renewable energy, with its share in total electricity generation projected to rise to approximately 26% by FY2026. India's power demand surged 5% in January 2026, recovering from an earlier dip, indicating robust underlying economic activity. This demand is expected to remain resilient, driven by manufacturing expansion, EV adoption, and data center growth.

Concurrently, the Indian metals and mining sector, a key area for GMDC, is poised for momentum in 2026 due to supportive global macro factors, strong domestic demand, and policy interventions. The Union Budget 2026 has further emphasized the development of critical minerals, with initiatives like reduced customs duty on Monazite and the establishment of "Rare Earth Corridors". This strategic push for mineral self-reliance significantly benefits players like GMDC, which is transitioning from a traditional lignite miner to a strategic player in India's critical minerals ecosystem, including rare earth elements (REE).

Financial Forensics

Both REC and GMDC stand out for their strong fundamentals and strategic importance within their respective sectors, making them attractive investment propositions in February 2026.

REC Ltd. (Rural Electrification Corporation Limited) is a leading infrastructure finance company under the Ministry of Power, Government of India. It focuses on financing the entire power sector value chain, including generation, transmission, distribution, and increasingly, renewable energy projects.

• Financial Health: REC reported 12.08% YoY profit growth and 18.59% sales growth in FY2025, driven by higher disbursements to renewable and transmission projects. The stock trades at a P/E of just 5.76x and P/B of 1.19x, appearing undervalued relative to its 21.6% Return on Equity (ROE) and 4.77% dividend yield. The company has shown impressive 615.9% returns in 5 years, with a 35.8% quarterly revenue growth and a robust 74.7% profit margin.
• Growth Drivers: REC is a key enabler of India's energy transition, with plans to grow its renewable loan book portfolio from 9% to 30% by the end of 2030. India's power sector capital expenditure is projected to exceed ₹15 lakh crore by 2030, with REC as a crucial financier. The government's push for 500 GW of non-fossil fuel capacity by 2030 and significant green energy financing initiatives provide strong tailwinds.
• Analyst Targets: Angel One recommends buying REC shares around ₹375 with a target of ₹400 and a stop loss of ₹360. Other expert forecasts for REC's share price target in 2026 range from ₹220-₹250 to ₹400-₹440 and around ₹390, reflecting continued policy support and stable asset quality. The long-term target for 2030 is projected between ₹340-₹380 and approximately ₹580.

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Gujarat Mineral Development Corporation Ltd (GMDC) is a state-owned mining company, one of India's largest producers of lignite, and a diversified player in industrial minerals like bauxite and fluorspar.

• Financial Health: As of January 2026, GMDC has a market capitalization of ₹18,332.70 crore. The company reported 15.75% YoY sales growth and 15.47% YoY profit growth. Its P/E (TTM) is 18.18x and P/B (TTM) is 2.74x, with an ROE of 11.07% and a dividend yield of 1.75%.
• Strategic Shift: GMDC has gained significant investor attention due to its strategic entry into rare earth elements (REE), critical raw materials for electric vehicles, defense systems, and renewable energy technologies. Backed by the Government of Gujarat and India's push for mineral self-reliance, GMDC offers a unique blend of traditional mining strength and future-facing diversification. The customs duty on Monazite, a primary ore for rare-earth elements, was reduced to zero in the Budget 2026, further supporting its ventures.
• Analyst Targets: Angel One recommends buying GMDC shares around ₹610 with a target of ₹670-₹680 and a stop loss of ₹570. Other expert forecasts for GMDC's share price target in 2026 range from ₹480–₹550 to approximately ₹720 and even between ₹435-₹1,063 (though the higher end appears less conservative). The 2030 target could reach ₹600–₹750 if rare earth plans succeed, with some projections as high as ₹1,880. However, some brokerages have expressed a "REDUCE" rating with a target price of ₹231, implying a significant downside from current levels, citing factors like higher cost of production in Q3 FY26. Investors should consider this divergence in expert opinions.

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Comparison Snapshot: REC vs. GMDC (as of February 2026)

Metric	REC Ltd. (Power Finance)	GMDC Ltd. (Mining)
Market Capitalization	₹98,798.56 Cr	₹18,332.70 Cr
P/E Ratio (TTM)	5.76x	18.18x
P/B Ratio (TTM)	1.19x	2.74x
Return on Equity (ROE)	21.63%	11.07%
Dividend Yield	4.77%	1.75%
Sales Growth (YoY)	18.59% (FY25)	15.75% (FY25)
Profit Growth (YoY)	12.08% (FY25)	15.47% (FY25)
Key Focus	Power Sector & Green Energy Financing	Lignite, Critical Minerals, Rare Earths
Angel One Target (Feb 2026)	₹400	₹670-₹680
Angel One Stop Loss (Feb 2026)	₹360	₹570

Source: FinScann Analysis, Angel One Recommendations, Company Filings (February 2026)

Market Impact

The recommendations for REC and GMDC come at a time when the broader Indian market is showing an upward bias. The Sensex and Nifty 50 have seen gains, with experts projecting the Sensex to hit between 90,000 and 1,07,000 by December 2026 in optimistic scenarios, driven by earnings recovery and easing foreign outflows. The Nifty 50 has also sustained a bullish trajectory, logging gains for four consecutive trading sessions and eyeing the 26,000 level.

PSU stocks, in particular, are enjoying significant investor attention. The NIFTY PSE index and NIFTY PSU Bank index have delivered returns of 5.5% and 7.8% respectively in the first two months of 2026, outperforming the Nifty 50. This resilience is attributed to their strategic importance, stable business models, and government backing. The government's emphasis on higher payouts from profitable state-owned firms in its 2026 fiscal policy has also led to a surge in dividend declarations, with REC and PFC declaring interim dividends of ₹4.00 each this month.

The capital expenditure push by the government, including ₹12.2 lakh crore towards public capex and infrastructure development in the Union Budget 2026, is a major tailwind for sectors like power and mining. This robust domestic institutional buying and government-led investment are acting as shock absorbers against global volatility, maintaining positive sentiment in the Indian market.

Key Takeaways

For investors eyeing the current market trends, FinScann highlights the following:

• Strategic PSU Plays: Both REC and GMDC are deeply aligned with India's national growth priorities – energy transition and critical mineral self-reliance. This sovereign backing provides a significant stability factor.
• Strong Technicals: Osho Krishan's recommendations are rooted in favorable technical setups, indicating potential for short to medium-term upward momentum for both stocks.
• Dividend Income: REC, a 'Maharatna' PSU, is known for its consistent dividend payouts, offering an attractive income stream alongside capital appreciation potential.
• Growth Catalysts: REC benefits from massive government spending on the power sector and green energy financing. GMDC is strategically positioned to capitalize on India's burgeoning demand for critical minerals and rare earth elements.
• Risk Mitigation: While opportunities are significant, investors should adhere to the recommended stop-loss levels and monitor for any shifts in policy or global commodity prices, especially for GMDC, where some analysts have expressed a bearish outlook.
• Diversification Potential: Including these PSUs can offer portfolio diversification, especially for those seeking exposure to government-backed entities in critical infrastructure and resource sectors.

Moat Analysis & Investment Play

The "moat" for companies like REC and GMDC is largely institutional and strategic. REC benefits from its status as a Maharatna PSU and its integral role in financing India's power sector, particularly the ambitious renewable energy targets. This strong government backing, long-term lending visibility, and policy tailwinds effectively create a formidable barrier to entry for competitors. Its consistent financial performance and high dividend yield further solidify its position as a defensive yet growing "investment play" in the Indian energy transition narrative.

For GMDC, the moat is dual-pronged: its established dominance in traditional mining (lignite) and its pioneering move into critical minerals and rare earth elements. Government support for mineral self-reliance, including policy changes like duty exemptions and the establishment of "Rare Earth Corridors," grants GMDC a strategic advantage in a sector vital for India's future technologies and defense. This positions GMDC as a long-term "investment play" on India's transition towards a high-tech, resource-independent economy, though execution risk in new ventures and commodity cycle volatility should be monitored.

Q: What are the primary reasons for Osho Krishan's "Buy" recommendations on REC and GMDC? A: Osho Krishan's recommendations for REC and GMDC are based on strong technical indicators. For REC, it's the decent buying traction, rebound from oversold parameters, and positive divergence. For GMDC, it's a rebound from the 100 DEMA, a positive MACD crossover, and a cycle of higher lows, suggesting potential for upward movement.

Q: How do government policies support the growth of REC and GMDC? A: REC benefits from the Indian government's massive investment and policy push in the power sector, especially towards renewable energy and rural electrification, as a key financier. GMDC is supported by the government's strategic focus on critical mineral self-reliance, including duty rationalization on rare earth elements and initiatives to boost domestic mining.

Q: What are the potential risks associated with investing in these PSU stocks? A: While PSUs offer stability, risks include policy changes, government intervention, and sector-specific challenges. For REC, a potential risk could be asset quality concerns if power sector entities face financial distress, though it has a near-zero NPA portfolio. For GMDC, risks involve commodity price volatility, successful execution of its rare earth projects, and competition in the mining sector. Some brokerage houses have also issued "REDUCE" ratings for GMDC due to concerns over operational costs.

Q: What are the current market trends supporting PSU stocks in February 2026? A: PSU stocks are currently supported by robust domestic institutional investor (DII) inflows, positive earnings outlooks, and the government's continued capital expenditure push in infrastructure and key sectors. The NIFTY PSE index has shown resilience and outperformance in early 2026, indicating strong investor confidence in government-backed entities.

Q: Should investors consider these recommendations for short-term or long-term gains? A: Osho Krishan's analysis suggests "near-term" momentum. However, given their fundamental alignment with India's long-term growth story in power, renewable energy, and critical minerals, both REC and GMDC also present compelling cases for long-term investment, provided investors monitor their financial performance and sector-specific developments.

FinScann Verdict

FinScann analysis concurs with the bullish outlook on REC and GMDC, driven by their strategic importance to India's energy transition and critical minerals mission. With strong government backing, favorable technicals, and robust sector tailwinds, these PSU stocks offer a compelling blend of value and growth for investors in February 2026. However, diligent monitoring of financial metrics and commodity market dynamics is advised.

Disclaimer: For information only; not investment advice. Stock market investments carry risks. Please consult a SEBI-registered advisor before investing. FinScann assumes no liability for decisions made based on this report.