Buy Indian Renewable Energy Development Agency Ltd For Target Rs. 196 By Geojit Financial Services Ltd
Fundamental View
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 Rs.17,236cr, compared to Rs.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 Rs.1,197cr compared to Rs.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.
Technical View
* The stock has corrected nearly 50% from its recent highs. However, over the past two trading sessions, it has shown resilience and signs of a trend reversal.
* The momentum indicator RSI has rebounded from oversold levels and is currently positioned at 42, while the MACD has turned positive, indicating an improvement in momentum, which could support a short-term price rebound.
* 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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SEBI Registration Number: INH200000345
