IREDA shares resume fall after 2-day surge; should you consider averaging?

Indian Renewable Energy Development Agency (IREDA) Ltd shares slipped on Thursday, halting their two-day strong upward move. The stock settled 1.28 per cent lower at Rs 149.95. At this closing value, it has tumbled 32.39 per cent in the calendar year 2025 so far.

The state-run renewable energy financier said it would hold a board meeting on March 25 to consider the borrowing plan for financial year 2025-26 (FY26). For FY25, the borrowing limit has been increased by Rs 5,000 crore to Rs 29,200 crore.

In addition, IREDA has launched its first-ever issue of perpetual bonds for an amount of Rs 1,247 crore at an annual coupon rate of 8.40 per cent. The PSU has also received a refund of Rs 24.48 crore from the Income Tax (I-T) department for assessment year (AY) 2011-12 in relation to certain disallowances. "Refund of approximately Rs 195 crore is under process for similar relief provided by CIT (Appeals) for AYs 2010-11, 2012-13, 2013-14, and 2015-16 to 2018-19, which is yet to be received," IREDA added.

The Rs 140-130 range would be a strong support for IREDA's stock. One of the analysts said investors can average it in the mentioned support zone while another suggested that there could be some pain left in the counter.

"Support for IREDA's stock will be at Rs 130. It can test the mentioned support level but the downside looks limited from current levels. Those looking to average it for the long term can do so at around the Rs 130-140 zone. On the higher side, expected near-term targets will be Rs 200-210," Akshay Bhagwat, Senior Vice-President of Derivatives Research at JM Financial Services, told Business Today.

"IREDA has been experiencing a significant downward trend. On the support side, the historical range of Rs 140-130 is expected to provide some stability. On the resistance side, we may encounter obstacles at Rs 155-162 levels. A sustained breakthrough above this resistance could generate momentum in the stock," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"IREDA is a company thought to be in solar power generation. People bought it as a power generating company not realising this also is a finance company which is catering primarily to renewable energy and within renewable energy, focusing on solar. It's again like a bank or an NBFC but dedicated to a particular activity. From Rs 32 to 320, a 10x jump from listing to its high and now it's around 150 or thereabouts. This was the kind of madness that happened in these shares. So, I believe there is still some pain left in the counter," said market expert Arun Kejriwal.

In terms of earnings, the company clocked a 26.8 per cent year-on-year (YoY) growth in its net profit for the December quarter (Q3 FY25). Profit climbed to Rs 425.4 crore in Q3 FY25 as against Rs 335.5 crore in the same period last year.

IREDA's net interest income (NII) climbed 39 per cent YoY, to Rs 622.3 crore against Rs 448.1 crore in Q3 of the previous year. Revenue from operations jumped 35.6 per cent YoY to Rs 1,698.45 crore in Q3 FY25 against Rs 1,252.85 crore in the year-ago period.

The company is a 'Navratna' PSU under the administrative controls of the Ministry of New and Renewable Energy. As of December 2024, the government held a 75 per cent stake in it. The organisation offers 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.