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IREDA - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 20 Dec 25, 11:15 pm
Back to Fundamental ListFundamental Rating: 3.8
| Stock Code | IREDA | Market Cap | 37,405 Cr. | Current Price | 133 ₹ | High / Low | 234 ₹ |
| Stock P/E | 21.7 | Book Value | 46.0 ₹ | Dividend Yield | 0.00 % | ROCE | 9.37 % |
| ROE | 18.0 % | Face Value | 10.0 ₹ | DMA 50 | 143 ₹ | DMA 200 | 157 ₹ |
| Chg in FII Hold | -0.12 % | Chg in DII Hold | -0.38 % | PAT Qtr | 549 Cr. | PAT Prev Qtr | 247 Cr. |
| RSI | 31.3 | MACD | -3.98 | Volume | 50,71,124 | Avg Vol 1Wk | 38,57,222 |
| Low price | 129 ₹ | High price | 234 ₹ | PEG Ratio | 0.56 | Debt to equity | 5.41 |
| 52w Index | 3.85 % | Qtr Profit Var | 41.6 % | EPS | 6.28 ₹ | Industry PE | 21.2 |
📊 Core Financials
- Revenue & Profit: Quarterly PAT rose from ₹247 Cr. to ₹549 Cr. (41.6% growth).
- Margins: ROE at 18.0% is strong, while ROCE at 9.37% is modest.
- Debt: Debt-to-equity ratio of 5.41 indicates high leverage, typical of financing firms.
- Cash Flows: No dividend payout, suggesting reinvestment focus for growth.
💹 Valuation Indicators
- P/E Ratio: 21.7 vs Industry PE of 21.2 → fairly valued.
- P/B Ratio: Current Price ₹133 / Book Value ₹46 ≈ 2.89 (reasonable premium).
- PEG Ratio: 0.56 → attractive relative to earnings growth.
- Intrinsic Value: Fairly valued, supported by strong earnings momentum.
🏢 Business Model & Competitive Advantage
- Indian Renewable Energy Development Agency (IREDA) finances renewable energy and green infrastructure projects.
- Government backing ensures stability and credibility.
- Competitive advantage lies in its niche focus on renewable energy financing, aligned with India’s green energy push.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation between ₹125–₹135.
- Long-Term Holding: Suitable for investors seeking exposure to renewable energy financing, though leverage risk must be considered.
✅ Positive
- Quarterly profit growth of 41.6%.
- Strong ROE at 18.0%.
- PEG ratio of 0.56 indicates attractive growth valuation.
⚠️ Limitation
- High debt-to-equity ratio (5.41) adds financial risk.
- ROCE at 9.37% is modest.
- No dividend yield.
📉 Company Negative News
- Decline in FII holdings (-0.12%).
- Decline in DII holdings (-0.38%).
- Stock trading below DMA 50 (₹143) and DMA 200 (₹157), showing weak technical momentum.
📈 Company Positive News
- Quarterly profits improved significantly.
- Strong sectoral demand for renewable energy financing.
- Government support ensures long-term stability.
🏭 Industry
- Industry PE at 21.2 suggests IREDA trades in line with peers.
- Renewable energy sector benefits from government incentives and rising demand.
- Peers face higher competition, while IREDA enjoys niche positioning.
🔎 Conclusion
IREDA is a government-backed renewable energy financing company with strong earnings growth and attractive PEG valuation.
While high leverage and modest ROCE pose risks, its niche focus and sectoral demand provide long-term potential.
Accumulation near ₹125–₹135 is recommended for investors seeking exposure to India’s renewable energy growth story.
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