By The Indian Renewable Energy Development Agency has made headlines by becoming the first PSU to declare its Q1 results for 2024, setting a promising tone for the earnings season in the banking and financial sectors. With a 30% year-on-year rise in Profit After Tax and a 32% increase in operational revenue, IREDA’s performance has caught the attention of investors and market analysts alike.
On Friday, IREDA reported a PAT of ₹383.69 crore, up from ₹294.58 crore in the same period last year. The state-owned non-banking financial company (NBFC) also saw a significant increase in operations revenue, which rose by over 32% year-on-year. One of the standout metrics was the 386% year-on-year increase in sanctioned loans, reflecting the company’s growing influence in the renewable energy sector.
Avinash Gorakshkar, Head of Research at Profitmart Securities, highlighted IREDA’s strategic move to release its quarterly results ahead of the Union Budget 2024. This early declaration underscores the company’s eagerness to showcase its robust financial health and operational efficiency.
Gorakshkar noted that the market is anticipating subsidies for renewable energy companies under the Production Linked Incentive (PLI) scheme, which the Union Finance Minister, Nirmala Sitharaman, is expected to announce in the forthcoming budget. Such subsidies could significantly benefit IREDA, potentially driving its share price higher.
When Dalal Street resumes trading on Monday, IREDA’s shares are expected to be closely watched by bullish investors. Market experts predict a sharp upside movement in the company’s share price in the near term. Sumeet Bagadia, Executive Director at Choice Broking, commented on the positive outlook for IREDA’s stock. He mentioned that the share price is currently facing a minor resistance at the ₹300 per share mark. If the stock manages to break through this resistance, it could quickly reach the ₹350 target.
For current shareholders, Bagadia advises holding onto IREDA shares while maintaining a stop loss at ₹250. For new investors considering entering the market, he suggests a cautious approach. Bagadia recommends waiting for the stock to break above the ₹300 mark or retrace to around ₹265 to ₹260, which could present a ‘bottom fishing opportunity.’ This strategy involves purchasing stocks at their lowest prices with the expectation that they will rebound, offering significant gains.
The anticipation surrounding the PLI scheme in the Union Budget 2024 adds another layer of interest to IREDA’s stock. The scheme aims to boost manufacturing in various sectors, including renewable energy. If the subsidy is announced, it could substantially boost IREDA, reinforcing its position as a key player in the renewable energy market.
IREDA’s strong Q1 results and the potential benefits from the upcoming budget have positioned the company as a promising investment opportunity. With market experts forecasting significant gains, IREDA’s shares are likely to remain under the radar of investors looking for high-growth opportunities in the renewable energy sector. As the earnings season progresses, all eyes will be on how IREDA capitalizes on these favorable conditions to drive further growth and profitability.
