IREDA share price falls over 3% after Q3 results. Should you buy, sell or hold the PSU stock?
- IREDA stock price has fallen over 5% in three months and is down 10% in six months. However, IREDA shares have given multibagger returns of 105% in the past one year.
IREDA share price declined over 3% on Friday after the state-run Non-Banking Financial Company (NBFC) reported its earnings for the third quarter of FY25. IREDA stock price fell as much as 3.4% to ₹208.50 apiece on the BSE.
The ‘Navratna’ PSU company, Indian Renewable Energy Development Agency reported a net profit of ₹425.38 crore in Q3FY25, registering a growth of 27% from ₹335.5 crore in the same period last fiscal year.
The company’s total revenue from operations during the quarter ended December 2024 increased by 35.6% to ₹1,698.45 crore from 1,208.10 crore, year-on-year (YoY).
Net interest income (NII) in Q3FY25 was up 39% to ₹622.3 crore from ₹448.1 crore, YoY. Operating margins, however, fell by 330 basis points (bps) to 30.42% from 33.72%, YoY.
The state-owned NBFC’s asset quality improved as the gross non-performing assets (NPAs) dropped to 2.68% in the third quarter of FY2025, compared to 2.90% in the same period a year ago.
The company’s outstanding loan book was at ₹68,960 crore as of the quarter ended December 31, 2024. The outstanding loan book was at ₹50,580 crore in the same period the previous year.
“India’s largest pure-play green financing NBFC, IREDA, reported a strong performance in Q3FY25. The outstanding loan book showed significant growth of 36%, indicating a robust recovery in the overall sector. Notably, the improvement in loan disbursement suggests a positive impact on the overall economy, which may lead to stronger earnings in future quarters. Additionally, NPAs declined sequentially, reflecting stable asset quality. The net interest margin improved by 13 bps YoY, primarily due to a decrease in the cost of funds,” said Abhishek Pandya, Research Analyst, StoxBox.
Looking ahead, he believes IREDA’s continued success will rely on its ability to manage the net interest margin, monitor margin trends, and enhance asset quality further
Should you buy IREDA shares?
Anshul Jain, Head of Research at Lakshmishree Investment and Securities, said that IREDA posted strong financial results (both sequentially and yearly).
“The strong economic performance reflects IREDA’s strategic focus on leveraging opportunities in the renewable energy sector, driving sustained profitability and revenue growth. With renewable energy demand expected to accelerate further, the company remains well-positioned for long-term expansion. IREDA stock is anticipated to react positively during the market opening, presenting an attractive buy opportunity for long-term investors,” said Jain.
Sumeet Bagadia, Executive Director at Choice Broking, suggests holding IREDA shares to existing investors and taking positional calls to new investors.
“IREDA shares have strong support at ₹200. On the technical chart, the stock is looking sideways, but if it breaks above the ₹230 apiece level on a closing basis, we can expect the stock to touch the ₹260 mark in the medium term. So, IREDA shareholders are advised to hold the scrip for a near-term target of ₹230 and a medium-term target of ₹260. Fresh investors can also take a positional call in IREDA shares for a medium-term target of ₹260,” Bagadia said.
IREDA Stock Price Trend
IREDA stock price has fallen over 5% in three months and is down 10% in six months. However, IREDA shares have given multibagger returns of 105% in the past one year.
IREDA stock hit its 52-week high at ₹310 on July 15, 2024, while it touched its 52-week low of ₹101.20 on January 10, 2024, as per BSE data.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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