IREDA Hits Record High Ahead Of Q1 Results, Up 166% This Year So Far; Should You Buy?

Shares of Indian Renewable Energy Development Agency Ltd (IREDA) continued their record run in Friday’s trading session. The stock jumped 7.41 per cent to hit an all-time high of Rs 304.60 ahead of the company’s fiscal first-quarter earnings. Investors expect the company to report healthy growth numbers during Q1FY25, following the upbeat provisional business performance.

In the previous session, the stock surged over 17 per cent to hit a fresh record high of Rs 289.33 on the National Stock Exchange (NSE) before closing 12 per cent higher at 278.95.

In its Q1FY25, business update shared late last month, IREDA said it recorded loan sanctions of Rs 9,136 crore in the June quarter, up 382.62 percent on-year (YoY). The PSU’s loan disbursements for the quarter came in at Rs 5,320 crore, up 67.61 percent YoY.

The renewable energy PSU is scheduled to announce its earnings for the June 2024 quarter (Q1 FY25) later in the day. Domestic brokerage Phillip Capital expected IREDA to report a net interest income of Rs 501.8 crore, up 40.8 per cent on a year-on-year (YoY) basis and 12 per cent sequentially.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said, “IREDA has been in focus after getting ‘Navratna’ status. In addition, the focus on renewable energy sector is still going up and IREDA is one of the key beneficiaries. The stock has multiplied from its IPO price.” The state-owned firm’s initial public offering (IPO) price was Rs 32. It has given stellar returns after getting in listed on November 29 last year.

“Investors with a medium- to short-term view need to have a trailing stop loss. For the long term, one can hold this stock with upcoming results in focus. The stock is in the momentum zone and traders should maintain a strict stop loss. It is fairly valued and can still gain another 5 per cent,” Bathini added.

Amit Goel, Co-Founder and Chief Global Strategist at Pace 360, said, “Foreign portfolio investors (FPIs) doubled their stake in IREDA during the June quarter, holding a 2.7 per cent stake compared to a 1.36 per cent stake in the previous quarter.”

Asked about the technical outlook of IREDA share price, Sumeet Bagadia, Executive Director at Choice Broking, said, “IREDA shares are looking positive on the chart pattern. The PSU stock has made a strong base at Rs 250, and it is facing hurdles at Rs 300 and Rs 350 on the daily and weekly charts. So, IREDA share price may touch the Rs 350 mark in the near term once it breaches the immediate hurdle of Rs 300 on a closing basis.”

IREDA is under the administrative controls of the Ministry of New and Renewable Energy. As of June 2024, the government held a 75 per cent stake in it.

The organisation offers a comprehensive array of financial products (fund- and non-fund-based) associated services, from project inception to post-completion, for renewable energy projects and related activities like equipment manufacturing and transmission.

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