⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
IREDA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | IREDA | Market Cap | 36,034 Cr. | Current Price | 128 ₹ | High / Low | 196 ₹ |
| Stock P/E | 19.1 | Book Value | 46.0 ₹ | Dividend Yield | 0.00 % | ROCE | 9.37 % |
| ROE | 18.0 % | Face Value | 10.0 ₹ | DMA 50 | 138 ₹ | DMA 200 | 152 ₹ |
| Chg in FII Hold | 0.15 % | Chg in DII Hold | -0.06 % | PAT Qtr | 585 Cr. | PAT Prev Qtr | 549 Cr. |
| RSI | 39.8 | MACD | -2.53 | Volume | 1,52,63,036 | Avg Vol 1Wk | 1,06,39,268 |
| Low price | 124 ₹ | High price | 196 ₹ | PEG Ratio | 0.49 | Debt to equity | 5.41 |
| 52w Index | 5.71 % | Qtr Profit Var | 37.5 % | EPS | 6.78 ₹ | Industry PE | 19.1 |
📊 Core Financials
- Revenue & Profitability: PAT improved from 549 Cr. to 585 Cr. QoQ (+37.5%), showing strong earnings growth.
- Margins: ROE at 18.0% is healthy, while ROCE at 9.37% reflects moderate efficiency.
- Debt: Debt-to-equity ratio of 5.41 is high, typical for a financing company, but manageable with government backing.
- Cash Flow: Dividend yield of 0.00% indicates reinvestment focus, with no direct shareholder payout.
💹 Valuation Indicators
- P/E Ratio: 19.1 vs Industry PE of 19.1 → fairly valued compared to peers.
- P/B Ratio: Current Price (128 ₹) / Book Value (46 ₹) ≈ 2.78, moderately expensive.
- PEG Ratio: 0.49 suggests attractive valuation relative to growth prospects.
- Intrinsic Value: Current price near support (124 ₹) offers limited downside risk compared to high of 196 ₹.
🏦 Business Model & Competitive Advantage
- Indian Renewable Energy Development Agency (IREDA) operates as a government-backed financing institution for renewable energy projects.
- Competitive advantage lies in monopoly-like status in renewable energy financing and strong government support.
- Overall health is stable, with consistent profitability and growth, though high leverage remains a concern.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive entry between 124 ₹ – 130 ₹, near support levels.
- Long-Term Holding: Suitable for investors seeking exposure to renewable energy financing, but requires monitoring of debt levels and institutional sentiment.
✅ Positive
- Strong PAT growth (+37.5% QoQ).
- Healthy ROE (18.0%) supports shareholder value creation.
- PEG ratio (0.49) indicates undervaluation relative to growth.
- Government backing ensures long-term stability.
⚠️ Limitation
- High debt-to-equity ratio (5.41) reflects leverage risk.
- ROCE (9.37%) remains modest compared to private peers.
- No dividend yield, limiting direct investor reward.
📉 Company Negative News
- DII holdings decreased (-0.06%), showing reduced domestic institutional confidence.
- Stock trading below DMA 50 (138 ₹) and DMA 200 (152 ₹) indicates technical weakness.
📈 Company Positive News
- FII holdings increased (+0.15%), reflecting foreign investor interest.
- PAT improved QoQ, showing consistent profitability growth.
🏭 Industry
- Industry PE at 19.1 is equal to IREDA’s PE, indicating fair valuation.
- Renewable energy sector growth driven by government initiatives and rising demand for clean energy.
- IREDA benefits from monopoly-like position in renewable energy financing.
🔎 Conclusion
- IREDA offers stability with government backing and strong earnings growth.
- Valuation is fair, with PEG ratio highlighting growth potential, though high leverage remains a risk.
- Best suited for long-term investors entering near 124–130 ₹, with potential upside as renewable energy demand expands.