IREDA Stock Poised for Growth: Geojit Financial Services Sets Target at ₹196
IREDA Stock : The Indian Renewable Energy Development Agency (IREDA) has been making significant strides in the renewable energy financing sector, positioning itself as a key player in India’s clean energy transition. Geojit Financial Services has recently released a research report on IREDA, setting a price target of ₹196 per share, reflecting strong growth potential.
With India aiming to achieve 500 GW of non-fossil fuel energy capacity by 2030, IREDA’s role in financing renewable energy projects is more crucial than ever. The company’s strong financial performance, improving asset quality, and ambitious growth plans make it a stock to watch.
IREDA’s Impressive Financial Performance
IREDA, a public sector Non-Banking Financial Company (NBFC) under the Ministry of New and Renewable Energy (MNRE), has been actively funding renewable energy projects since its establishment in 1987. The company’s recent financial performance highlights its robust growth trajectory:
- Loan Book Expansion: IREDA’s loan book saw a remarkable 36% year-on-year (YoY) growth, reaching ₹68,960 crore in the first nine months of FY25. This growth is driven by an increase in project disbursements.
- Disbursement Growth: The company’s loan disbursements surged by 41% in 9MFY25, totaling ₹17,236 crore, compared to ₹12,220 crore in 9MFY24.
- Profitability Boost: IREDA’s Profit After Tax (PAT) grew by 30.82%, reaching ₹1,197 crore in 9MFY25, up from ₹915 crore in 9MFY24.
- Asset Quality Improvement: The company’s asset quality improved, with the Gross Non-Performing Asset (GNPA) ratio reducing to 2.68% from 2.90% in 9MFY24.
Stock Market Outlook and Growth Potential
Geojit Financial Services has highlighted the stock’s upward momentum, projecting it to reach ₹196. Analysts believe that IREDA’s stock price could move towards ₹155 in the near term, aligning with its 21-day moving average (DMA) and a crucial support level. A sustained breakout above this level could propel the stock further into the ₹178–₹182 range in the upcoming sessions.
IREDA is currently trading at a one-year forward price-to-book (P/B) ratio of 3.4x, reflecting its valuation in comparison to its book value. The company’s Return on Assets (ROA) stands at 2.4%, while its Return on Equity (ROE) is an impressive 20%, indicating efficient capital utilization.
The Road Ahead: India’s Renewable Energy Ambitions
The Indian government has set an ambitious target of 500 GW of non-fossil fuel energy capacity by 2030, out of which 195 GW has already been achieved as of June 2024. This leaves a massive opportunity for renewable energy financing, a space where IREDA is well-positioned.
As renewable energy adoption accelerates, IREDA’s role in funding solar, wind, hydro, and bio-energy projects will only expand. The company’s strong balance sheet and improving profitability make it a solid pick for investors looking to capitalize on India’s clean energy push.
Financial Ratios of IREDA (9MFY25)
| Financial Metric | Value |
|---|---|
| Loan Book Growth (YoY) | 36% |
| Disbursement Growth (YoY) | 41% |
| Profit After Tax (PAT) | ₹1,197 crore |
| PAT Growth (YoY) | 30.82% |
| Gross NPA Ratio | 2.68% |
| Return on Assets (ROA) | 2.4% |
| Return on Equity (ROE) | 20% |
| One-Year Forward P/B Ratio | 3.4x |
Frequently Asked Questions (FAQs)
1. What is IREDA, and why is it important?
IREDA (Indian Renewable Energy Development Agency) is a public sector NBFC under MNRE that finances renewable energy projects in India. It plays a key role in achieving India’s clean energy goals.
2. What is Geojit Financial Services’ price target for IREDA stock?
Geojit Financial Services has set a target price of ₹196 for IREDA’s stock, indicating strong growth potential.
3. How has IREDA’s financial performance been in FY25?
IREDA reported a 36% YoY loan book growth, 41% increase in disbursements, and 30.82% rise in PAT in the first nine months of FY25.
4. What are IREDA’s key financial ratios?
IREDA’s ROA is 2.4%, ROE is 20%, and its Gross NPA ratio has improved to 2.68%.
5. What is India’s renewable energy target, and how does IREDA fit in?
India aims to achieve 500 GW of non-fossil fuel energy capacity by 2030, creating significant opportunities for IREDA to finance new projects.
6. What is the short-term outlook for IREDA’s stock?
IREDA’s stock is expected to reach ₹155 in the short term and could further rise to ₹178–₹182, with a long-term target of ₹196.
Conclusion
IREDA stands at the forefront of India’s renewable energy financing sector, with strong financial growth and improving asset quality. With India’s ambitious clean energy targets, the company is poised for long-term success. Investors looking for opportunities in the renewable energy space may find IREDA an attractive bet, especially with Geojit’s bullish outlook.
For those interested in clean energy stocks, IREDA’s growth story is one to follow closely. 🚀
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.