Buy Indian Renewable Energy Development Agency; target of Rs 196: Geojit Financial Services

Geojit Financial Services research report on Indian Renewable Energy Development Agency

The Indian Renewable Energy Development Agency Limited (IREDA), established in 1987, a public sector NBFC under the Ministry of New and Renewable Energy (MNRE), promotes and finances renewable energy and energy efficiency projects in India. IREDA’s loan book marked a strong growth of ~36%YoY to Rs. 68,960 cr in 9MFY25. The expansion of the loan book is driven by a 41% growth in disbursements during 9MFY25, reaching ₹17,236cr, compared to ₹12,220cr in 9MFY24. With the expansion of the loan book and disbursements, the Profit After Tax (PAT) witnessed a growth of 30.82% in 9MFY25, reaching ₹1,197cr compared to ₹915cr in 9MFY24. IREDA’s asset quality improved during the quarter and 9MFY25, with the Gross NPA ratio reducing to 2.68% from 2.90% as of 9MFY24. The Government of India aims to achieve 500 GW of non-fossil fuel energy capacity by 2030, with 195 GW achieved by June 2024, highlighting the substantial scope for capacity expansion and financing needs. As per the market consensus, the stock is currently trading at a 1 yr fwd. P/B of 3.4x with ROA and RoE of 2.4% and 20% respectively.

Outlook

The stock may advance towards INR 155, which aligns with the 21-DMA and a key previous support level (red horizontal line). A sustained breakout above the 21-DMA could further propel the price toward the 178–182 range in the coming sessions.

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