The Indian Renewable Energy Development Agency Ltd (IREDA) has reported an impressive 36.2% increase in net profit for the second quarter of the fiscal year 2024-25 (Q2FY25), reaching ₹387.75 crore. This significant growth highlights the company’s robust performance in the renewable energy sector, prompting speculation about a potential bull run in IREDA’s share price.
Financial Performance Overview
For the quarter ending September 30, 2024, IREDA’s net profit surged from ₹284.73 crore in the same period last year to ₹387.75 crore. This marks a sequential increase of 1.1% from ₹383.69 crore reported in Q1FY25. Additionally, the company’s Net Interest Income (NII) climbed by 51.9% to ₹546.86 crore, up from ₹359.8 crore year-on-year.Total income for IREDA stood at ₹1,630.38 crore during this quarter, reflecting a year-on-year jump of nearly 39% from ₹1,176.95 crore in Q2FY24. Revenue from operations similarly increased by 38%, reaching ₹1,629.55 crore compared to ₹1,176.63 crore in the previous year.
Market Reaction and Share Price Movement
Ahead of the earnings announcement, IREDA shares closed 1.12% higher at ₹233.75 on the Bombay Stock Exchange (BSE). Following these positive results, market analysts are closely monitoring whether this momentum will translate into a sustained rise in share prices.
Asset Quality and Growth Prospects
Despite strong financial results, IREDA reported that its Gross Non-Performing Assets (NPA) remained stable at 2.19%, while Net NPA increased to 1.04% from 0.95% in the previous quarter. The debt-equity ratio stood at 5.85x, slightly up from 5.83x earlier.The outlook for India’s renewable energy sector remains positive, bolstered by major policy announcements and ambitious targets set by the government. As IREDA continues to expand its loan portfolio—sanctioning loans worth ₹17,860 crore (a staggering 303% increase year-on-year)—the company is well-positioned to capitalize on growth opportunities in this sector.
Future Outlook: Will There Be a Bull Run?
Analysts are optimistic about IREDA’s future performance, given its robust financial results and strategic positioning within the renewable energy market. The recent surge in net profit and NII suggests that investor confidence may grow, potentially leading to a bull run in IREDA shares.
India Hood Recommendation
Market expert Ravi Singh recommends investors consider buying IREDA shares in the range of ₹250-₹260, advising them to maintain a stop loss at ₹240. Analysts believe that if IREDA shares hold above these levels, there is potential for further upside, possibly targeting around ₹330 in the long term.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered as financial advice or an endorsement of any investment strategy. Investors are encouraged to conduct their own research and consult with financial advisors before making any investment decisions. The stock market is subject to risks, and past performance is not indicative of future results. India Hood does not accept any liability for any loss or damage arising from reliance on this information.
