This PSU stock is gaining attention as third-quarter results showcase impressive performance, with net interest income surging 39%. Strong asset quality and profitability metrics signal robust fundamentals in the banking sector.
Share Price Movement
The share price of IREDA Limited fell by 3.5 percent to Rs. 208.42 per share on Friday, a decrease from its previous close of Rs. 216.09 per share. The market capitalisation now stands at approximately Rs. 56,687 crore as of January 10, 2025.
What’s Driving the Price?
The recent drop in IREDA’s share price by 2.44% despite its strong Q3FY25 results can be attributed to several factors. While the company reported a net profit growth of 27%, total revenue growth of 35.6% and a net interest income growth of 39% YoY, investors might be concerned about the company’s operating margins, which fell by 330 basis points to 30.42% YoY.
Financial Highlights
According to its recent filing, in the quarter ending December 2024, IREDA’s consolidated revenue from operations has increased by 35.5 percent YOY from Rs. 1,391 crore in Q3 FY24 to Rs. 1,698 crore in Q3 FY25 and increased by 4.17 percent QoQ from Rs. 1,630 crore in Q2 FY25.
The company’s consolidated net profit has increased by 16.12 percent YoY, from Rs. 336 crore in Q3 FY24 to Rs. 425 crore in Q3 FY25. As compared to the last quarter of 2025, the company’s net profit has increased by 25.74 percent QoQ from Rs. 338 crore.
Net Interest Income (NII) increased by 39% YoY to Rs. 622 crore, while loan sanctions surged 129% to Rs. 31,087 crore from Rs. 13,558 crore. The loan book outstanding grew by 36% YoY, reaching Rs. 69,000 crore.
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Market Outlook
India’s financial sector is experiencing significant growth. The assets under management (AUM) of the Indian mutual fund industry have expanded from Rs. 9.16 trillion (US$ 110.63 billion) in 2014 to Rs. 64.97 trillion (US$ 780.70 billion) by July 2024, marking nearly a six-fold increase in 10 years.
The investment corpus in the Indian insurance sector is projected to reach US$ 1 trillion by 2025. With over 2,100 fintech companies, India is poised to become one of the largest digital markets, driven by the rapid expansion of mobile and internet usage.
Shareholding Pattern
As of the September 2024 shareholding pattern, IREDA Limited is primarily held by the promoters at 75 percent, foreign institutional investors hold 2.02 percent, and the public with 22.62 percent.
About Company
The Indian Renewable Energy Development Agency Limited (IREDA), established in 1987 under the Ministry of New and Renewable Energy, is a crucial player in India’s shift towards sustainable energy. As a Mini Ratna enterprise, IREDA finances renewable energy projects, aligning with its motto “Energy for Ever.” It offers various financial products like project term loans, refinancing options, and credit lines to a diverse range of clients, including public and private companies, EPC contractors, and renewable energy manufacturers.
Additionally, IREDA promotes green technologies through awareness campaigns and innovative financing schemes, continually expanding and digitalising to boost India’s renewable energy sector, as reflected in its growing financial performance.
Written By Fazal UI Vahab C H
Disclaimer
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