IREDA stock surges 6% to fresh record high ahead of Q1 results; up 364% in a year

IREDA stock has been in the spotlight since achieving 'Navratna' status. Additionally, the government's increased emphasis on the renewable energy sector, where IREDA stands as a key beneficiary, has propelled the stock to new heights.

Shares of the Indian Renewable Energy Development Agency (IREDA) gained over 6 percent to hit a fresh record high of Rs 303.70 on July 12 ahead of the company's fiscal first quarter earnings. Investors expect the company to report healthy growth numbers during Q1FY25, following the upbeat provisional business performance.

In the previous session, the stock surged over 17 percent to hit a fresh record high of Rs 289.33 on the National Stock Exchange (NSE) before closing 12 percent higher at 278.95.

In its Q1FY25, business update shared late last month, IREDA said it recorded loan sanctions of Rs 9,136 crore in the June quarter, up 382.62 percent on-year (YoY). The PSU's loan disbursements for the quarter came in at Rs 5,320 crore, up 67.61 percent YoY.

The outstanding loan book stood at Rs 63,150 crore, up 33.77 percent over the year-ago's Rs 47,207 crore.

The stock has seen interest from foreign investors. In the quarter that ended June 30, the foreign portfolio investors (FPIs) increased their ownership in the company to 2.7 percent, up from 1.36 percent in the previous quarter. However, despite this rise, no prominent shareholder is holding more than 1 percent.

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The number of small shareholders also saw an uptick during the April-June period as the total count of shareholders holding less than Rs 2 lakh worth of shares surged to 22.15 lakh, compared to 21.23 lakh in the March quarter.

On the other hand, domestic mutual funds reduced their stake in the company, opting to book profits as the stock reached new highs. As of June 30, Mutual funds hold a 0.24 percent stake in IREDA, down from half a percent at the end of March 2024.

IREDA stock has caught investors' attention since earning 'Navratna' status. Furthermore, the government's heightened focus on the renewable energy sector, where IREDA is a major player, has contributed to the stock's impressive rise.

"Given the government’s focus on the renewable sector, we remain positive on long-term growth prospects which will aid long-term sustained growth in AUM. Thus, we assign a Buy rating on the stock," ICICIdirect said in a recent note.

In Q4FY24, IREDA reported a net profit of Rs 337.37 crore registering a YoY growth of 33 percent. The quarter marked the highest loan disbursement in the history of the company as its loan Book grew to Rs 59,698 crore, up 26.81 percent on-year.

The public sector company also achieved all-time high annual loan sanctions of Rs 37,353 crore and disbursements of Rs 25,089 crore in FY24, registering an increase of 14.63 percent and 15.94 percent respectively.

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IREDA went public in November last year, selling shares in its IPO at Rs 32 apiece. The stock had a stellar debut, listing at a premium of 56.25 percent over the IPO issue price.

So far this year, IREDA stock has jumped 166 percent, more than doubling investors' money. Currently, the multibagger PSU stock is trading 771 percent above the issue price.