IREDA shares zoom 12% after robust fourth-quarter 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 finance non-banking financial company (NBFC) reported a 33% rise in fourth-quarter profit.

IREDA’s net profit rose 33% to ₹337.38 crore in the fourth quarter, compared to ₹253.62 crore in the fourth quarter of FY23.

Net interest income (NII), interest income from loans after deducting interest paid on deposits, rose 35.1% to stand at ₹481.4 crore in the fourth quarter of FY24, compared to ₹356.4 crore in the corresponding quarter of FY23.

IREDA achieved an all-time record profit of ₹1,252.23 crore for the financial year 2023-2024, registering a growth of 44.83% over the previous financial year 2022-2023.

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

Shares of IREDA are up about 70% so far this year. The stock is up 190% in the past year.

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

IREDA made its public market debut on November 29.

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

The company’s net worth as on March 31, 2024 has reached ₹8,559.43 crore as against ₹5,935.17 crore in the year ended March 31, 2023 (increased by 44.22%).

India plans to have 500 gigawatts (GW) of renewable energy by 2030. The government has reintroduced the Approved Model and Manufacturer List (ALMM) from April 1, boosting domestic solar equipment production and India’s drive for self-sufficiency in the sector. .

Implementation of ALMM is expected to help domestic module manufacturers’ operating margins remain strong at 12-14% in FY 2025, in line with the level likely to be this fiscal, CRISIL said.

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

“Indian module manufacturers are facing an onslaught of cheaper imports due to the temporary suspension of ALMM until April 1, 2024. However, trade restrictions on China – mainly by the US – are boosting overseas demand for Indian modules. In fact, India’s module exports are set to triple to 8-9 GW this fiscal. Markets abroad will remain good for Indian manufacturers in the coming fiscal as the US will continue to face a supply shortage due to rising demand and continued Chinese supply constraints,” said Ankit Hakhu, Director, CRISIL Ratings.