IREDA share price in focus post Q2 results; to set up wholly owned subsidiary for retail business; Buy or Sell?

Indian Stock Markets: Indian Renewable Energy Development Agency Ltd share price remains in focus post Q2 results that were declared post market hours on Thursday.

Q2 Net profit grows 36% year on year

Indian Renewable Energy Development Agency had reported Profit growth of 36% to ₹388 crore in the September'2024 quarter (Q2FY25) compared to ₹285 crore in the quarter ended September'2023 (Q2FY24). However on sequential basis net profit increase was 1.1% compared to ₹383.69 crore in Q1FY25.

Net Interest Income (NII) for IREDA increased by 51.9% to ₹546.86 crore from ₹359.8 crore over the same time last year,

Revenue from operations for IREDA increases 38.5% to ₹1,629.5 crore compared to ₹1,176.6 crore in the year ag quarter.

Summary Highlights Q2 FY25

IREDA in its investor presentation highlighted that

Yield on Loan Assets(%} (gross) stood at 9.92% at the end of Q2FY25 compared to 9.77 at the end of Q2FY24

Cost of borrowings(%) was at 7.8% at the end of Q2FY25 compared to 7.85% at the end of Q2FY24

To set up subsidiary for retail business

IREDA announced having received approval from DIPAM and from the Administrative Ministry i.e. Ministry of New and Renewable Energy for setting up of wholly owned subsidiary for retail business such as PM KUSUM, rooftop solar and other B2c segments in RE and emerging RE sector including EVs, Energy storage, Green Technologies, sustainability, Energy Efficiency etc.

Analysts views

Analysts say that impressive performance highlights IREDA's strong operational efficiency and growing market presence in the renewable energy sector

In a recent announcement, IREDA disclosed that the government plans to offload a 7% stake in the company through an institutional share sale, potentially enhancing liquidity and marketability of its shares highlighted Anshul Jain, Head of Research at Lakshmishree Investment and Securities

On the technical front, IREDA's stock traded higher than most of its simple moving averages (SMAs), except the 50-day SMA. The 14-day relative strength index (RSI) stood at 41.84, indicating balanced trading conditions. Despite being under the long-term Additional Surveillance Measure (ASM) framework by BSE and NSE due to high volatility, the stock remains attractive for long-term investors, building a strong base around the ₹230 level, said Jain.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

(more to come)