IREDA hits new lifetime high after strong Q1 results

In the results update, IREDA said its first-quarter revenue from operations jumped 32% year-on-year to ₹1,510 crore while net profit rose 30% to ₹384 crore.

IREDA’s gross non-performing asset (NPA) ratio stood at 2.19% in the quarter, while net NPA came in at 0.95%.

The company’s interest spread widened by 2.23% this quarter from 1.81% last year, as the cost of borrowing remained roughly the same (7.78% vs 7.83% last year) while the yield on loan assets climbed (10.01% vs 9.64% last year).

The financier has seen a sharp improvement in the quality of its book, with gross NPA falling from a peak of 8.77% in March 2021 while net NPA fell from 5.61%.

Shares of IREDA got investors' attention after its listing, as their revenue and net profit levels nearly doubled from the previous five years. The stock has climbed from a listing price of ₹50 to trade at ₹300 now. The IPO price band was ₹30-32, meaning investors who invested in the primary issue have seen their capital increase tenfold.

Its outstanding loans are split between solar thermal (27%), wind (17%), and hydro power (12%). The remaining 44% of the loan book consists of projects such as ethanol and biomass and loans to governments and utilities.

IREDA noted in its quarterly results update that its long-term borrowings are rated AAA stable by most leading rating agencies, such as ICRA and CARE.

IREDA is a state-owned company, and the government of India owns 75% of it.