IREDA Q1 Results: Net Profit Soars by 30% Amid Strong Asset Quality and Loan Growth

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IREDA Q1 Results: Net Profit Soars by 30% Amid Strong Asset Quality and Loan Growth

Shares of IREDA have risen nearly 10x from their IPO price of ₹32. The stock had listed in November last year.

July 13th, 2024 News

Indian Renewable Energy Development Agency Ltd. (IREDA) has reported a significant 30% growth in its net profit for the April-June quarter, reflecting the company's strong financial performance. The net profit for Q1 stood at ₹383.69 crore, up from ₹294.58 crore during the same period last year, and also higher than the ₹337 crore reported in the March quarter.

Key Financial Highlights:

Net Profit: Increased by 30% to ₹383.69 crore.
Gross NPA: Improved to 2.19% from 2.36% in the March quarter.
Net NPA: Slightly improved to 0.95% from 0.99% in the March quarter.
Debt-Equity Ratio: Reduced to 5.83x from 6.35x last year.

Business Performance:

In its business update for the June quarter, IREDA reported significant growth in loan sanctions and disbursements:

Loan Sanctions: Increased to ₹9,136 crore from ₹1,893 crore during the same period last year.
Loan Disbursements: Rose by 67.6% to ₹5,320 crore.
Loan Book: Expanded to ₹63,150 crore, marking a 33.8% growth compared to the year-ago period.

Future Plans:

IREDA CMD Pradip Kumar Das, in a recent interaction with CNBC-TV18, mentioned the company's plans to raise equity through a Follow-on Public Offer (FPO), pending government approval. The proposed FPO is expected to be between ₹4,000 crore to ₹5,000 crore and may take place between November this year and February next year.

Additionally, IREDA has requested inclusion under Section 54EC of the Income Tax Act from the Finance Ministry. This inclusion could potentially reduce borrowing costs for the company.

Market Performance:

Shares of IREDA have shown impressive growth, nearly 10x from their IPO price of ₹32. The stock, which listed in November last year, reached a new record high of ₹304.6 on Friday before settling at ₹284.65, ending the day 0.4% higher. The stock's robust performance reflects investors' confidence in the company's growth prospects and its strong financial health.

IREDA's continued focus on improving asset quality and expanding its loan book positions it well in the renewable energy financing sector. The upcoming FPO and potential tax benefits could further bolster its financial standing and market performance.

Conclusion:

IREDA's strong Q1 results and proactive measures for future growth indicate a promising outlook for the company. With improved asset quality and substantial growth in loan sanctions and disbursements, IREDA is poised to continue its upward trajectory in the renewable energy sector. Investors will be keenly watching the developments around the FPO and the potential tax inclusion, which could further enhance the company's growth prospects.