IREDA shares zoom 12% after robust Q4 results

Shares of Indian Renewable Energy Development Agency Ltd (IREDA) rose as much as 12% on Monday after the country's largest pure-play green financing non-banking financial company (NBFC) reported a 33% jump in its fourth-quarter profit.

Net profit of IREDA jumped 33% to ₹337.38 crore in the fourth quarter compared with ₹253.62 crore in Q4 FY23.

Net interest income (NII), interest income earned from loans after subtracting interest paid on deposits, increased 35.1%, stood at ₹481.4 crore in Q4 FY24 compared with ₹356.4 crore in the corresponding quarter of FY23.

IREDA achieved an all-time high annual profit of ₹1,252.23 crore for the financial year 2023-24, marking a growth of 44.83% over the previous fiscal year 2022-23.

Reacting to the development, shares of IREDA rose 12% to ₹179.45 apiece on the BSE, taking the company’s market cap to ₹46,431 crore.

Shares of IREDA have soared around 70% so far this year. The stock has jumped 190% over the past year.

IREDA has reduced its net non-performing assets (NPAs) to 0.99% in FY24 from 1.66% in FY23, demonstrating a significant reduction of 40.52% year-on-year.

IREDA made its public market debut on November 29.

The company’s loan book of IREDA has grown from ₹47,052.52 crore as on March 31, 2023, to ₹59,698.11 crore as on March 31, 2024 (registering a growth of 26.81%). IREDA has achieved all-time high annual loan sanctions of ₹37,353.68 crore and disbursements of ₹25,089.04 crore in the financial year 2023-24, registering an increase of 14.63% and 15.94% respectively, over previous financial year loan sanctions of ₹32,586.60 crore and disbursements of ₹21,639.21 crore. This marks the highest annual loan disbursement and sanction in the company's history.

The net-worth of the company as on March 31, 2024, has reached to ₹8,559.43 crore as against ₹5,935.17 crore, year ending March 31, 2023 (increased by 44.22%).

India plans to have 500 gigawatts (GW) of renewable energy by 2030. The government re-imposed the Approved List of Models and Manufacturers (ALMM) from April 1, boosting domestic solar equipment manufacturing and India's pursuit to achieve self-sufficiency in the sector.

The implementation of ALMM is expected to help keep operating margins of domestic module makers strong at 12-14% in fiscal 2025, in line with the level likely this fiscal, according to CRISIL.

This fiscal, profitability is expected to almost double over the previous fiscal as rising share of exports, which fetch a 15-20% premium over domestic prices, will more than offset the surge in imports in the absence of ALMM, the rating agency says.

“Indian module manufacturers are facing an onslaught of cheaper imports because of the temporary suspension of ALMM till April 1, 2024. However, the trade restrictions on China - mainly by the U.S. - are boosting overseas demand for Indian modules. In fact, India’s module exports are seen tripling to 8-9 GW this fiscal. Markets abroad will stay good for Indian manufacturers next fiscal, too, as the U.S. will continue to face a supply deficit due to its increasing demand and continuing restrictions on Chinese supply,” said Ankit Hakhu, director, CRISIL Ratings.