IREDA share price target 2024, 2025, 2026, 2028, 2030

Indian Renewable Energy Development Agency Limited (IREDA) is a leading financial institution in India dedicated to promoting and financing renewable energy projects across the country. Established in 1987, IREDA has played a pivotal role in accelerating India’s transition towards sustainable energy sources by providing financial assistance and advisory services for renewable energy projects.

With renewable energy capacity in India projected to reach 500 GW by 2030, IREDA’s role in financing utility-scale and distributed renewable energy projects will continue to grow in importance. As a key stakeholder enabling India’s renewable energy goals, analysis of IREDA’s share price trends, financial performance, market position, and future growth prospects provides valuable insights for investors and industry participants.

IREDA Company Overview

Historical Evolution

IREDA was established in 1987 as a Public Limited Government Company under the administrative control of the Ministry of New and Renewable Energy (MNRE). IREDA has been instrumental in the renewable energy journey of India through providing financial support right from the early years when renewable energy was taking root in the country.

Some key milestones in IREDA’s historical evolution include:

1995: IREDA started financing renewable energy projects under various World Bank lines of credit to accelerate capacity growth.
2010: IREDA surpassed cumulative financial sanctions of ₹25,000 crores, reflecting its expanding financing footprint.
2015: IREDA received ISO 9001:2008 certification for establishment of Quality Management System across all its operations.
2017: IREDA adopted a new logo symbolic of its commitment to a sustainable future through renewable energy.
2021: IREDA registered its highest ever annual sanctions of ₹23,921 crores, underlining its growing financing capabilities.

Through its evolving financing instruments and sustained focus on the renewable energy sector, IREDA has emerged as a trusted partner supporting India’s sustainability transition.

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Financial Indicators

Analysis of key financial indicators provides insights into IREDA’s financial health and performance over the years:

Profitability:

Net Profit: ₹864.63 Cr (FY 2023)
Profit Margin (PAT Margin): 24.83% (FY 2023)
EPS Growth: 36.48% YoY (FY 2023)

Financial Ratios:

ROE: 15.44% (FY 2023)
P/E Ratio: 0 (Currently)
P/B Ratio: 5.87 (Currently)
Debt-to-Equity Ratio: 5.12 (FY 2023)

Other Indicators:

Market Capitalization: ₹47,828.21 Cr (as of February 17, 2024)
52-Week High: ₹215
52-Week Low: ₹49.99
Dividend Yield: 0%
Shareholding Pattern: 75% Promoter holding

Recent Developments

Some recent developments that have significantly impacted IREDA’s market position include:

Strong Q3 Results: IREDA reported a 67% growth in net profit and a 57% increase in earnings per share for Q3 FY 2023-24.expand_more This indicates strong financial performance and investor confidence.expand_more
IPO Success: IREDA’s IPO in November 2023 received a positive response from investors, raising ₹5,325 crore and highlighting its potential for further growth.expand_more
Expansion into New Areas: IREDA launched its retail division in December 2023, focusing on providing loans to individual borrowers under schemes like PM-KUSUM and rooftop solar.expand_more This expands their reach and potential customer base.
Government Support: IREDA recently received approval from the Reserve Bank of India (RBI) to set up a subsidiary in GIFT City, a financial hub in Gujarat.expand_more This indicates continued government support for IREDA’s growth plans.
Focus on Innovation: IREDA signed a Memorandum of Understanding (MoU) with IIT Bhubaneswar for collaboration in clean energy innovation.expand_more This demonstrates their commitment to staying ahead of the curve in the renewable energy sector

Role in the Renewable Energy Sector

Core Business Model

IREDA is a Non-Banking Financial Company (NBFC) specializing in renewable energy project financing and advisory services. Its core business model involves:

Debt Financing – Providing long-term debt financing for renewable energy projects across solar, wind, small hydro, biomass, and other emerging technologies.
Loan Syndication – Syndicating loans through tie-ups with banks/financial institutions to mobilize large-scale financing for projects.
Advisory Services – Offering advisory services spanning project identification, technical consultancy, due diligence, and capacity building.
Innovative Financing – Launching innovative financing mechanisms such as medium-term loans, syndicated loans, venture capital assistance, and flexible debt-equity structures tailored to the needs of renewable energy developers and entrepreneurs.

Renewable Energy Financing Initiatives

Some key initiatives through which IREDA has accelerated renewable energy deployment in India include:

Utility-Scale Project Financing – Providing debt financing for some of India’s largest solar parks and wind farm projects.
Rooftop Solar Financing – Streamlined financing options for residential, institutional, and commercial rooftop solar projects through partnerships with aggregators.
Off-Grid and Distributed Renewables – Special financing schemes to promote decentralized renewable energy applications in rural areas including solar pumps and mini-grids.
Energy Storage Financing – Developing tailored debt products for supporting energy storage system deployment along with renewable energy projects.
Electric Mobility Financing – Financing scheme for charging infrastructure deployment to accelerate adoption of electric vehicles and energy storage.

Through a diverse project portfolio and customized financing instruments, IREDA continues to be a frontrunner in expanding renewable energy access and applications across India.

As of 17th February 2024, IREDA’s share price stands at 177.60, after witnessing significant growth from ₹98 in February 2021. The upward momentum in IREDA’s share price reflects the positive market outlook regarding the renewable energy financing sector in alignment with India’s ambitious renewable energy goals.

Upward: IREDA’s share price has been on an upward trend, gaining 255.90% from its 52-week low of ₹50 and currently trading at ₹177.95.
Strong Momentum: The stock recently hit its 52-week high of ₹214.8 on February 6th, demonstrating strong momentum.

Technical Analysis

Overall: IREDA’s technical analysis presents a mixed picture with both bullish and bearish signals.

Bullish factors:

Strong price momentum: The stock has gained 255.90% from its 52-week low and is currently trading above its 50-day and 30-day moving averages.
High delivery volume: Over 35% of the traded volume was delivery volume, indicating strong institutional participation.
Bullish candlestick patterns: There is one active bullish candlestick pattern, suggesting potential upside.
Oscillator trend: IREDA is trading above 5 out of 9 oscillators in the bullish zone, suggesting positive momentum.

Bearish factors:

RSI and MFI overbought: RSI at 59.9 and MFI at 74.6 indicate the stock might be overbought in the short term and due for a pullback.
MACD above centerline but below signal line: This suggests weakening momentum.
Trading below Pivot Point: The current price is below the Pivot level, which could act as resistance.
Technical score: Trendlyne Momentum Score is 28.06, indicating the stock is technically weak.

Key levels:

Resistance: 185.32 (R1), 192.68 (R2), 199.67 (R3)
Support: 170.97 (S1), 163.98 (S2), 156.62 (S3)

Shareholding Structure of IREDA

Shareholder	Percentage
Promoter	14.4
FII	0.0
DII	0.0
Public	85.6

Annual Results and Financial Performance

In-Depth Analysis of Recent Annual Results

Market Cap & Enterprise Value:

Market Cap: ₹47,828.21 Cr. (as of 16 Feb 2024)
Enterprise Value: N/A
P/E Ratio: 55.33 (based on 2023 EPS)
P/B Ratio: 5.87

Balance Sheet:

Total Assets: ₹501.5 Bn (2023)
Total Liabilities: ₹501.5 Bn (2023)
Debt/Equity Ratio: 0.0 (2023)
Cash & Equivalents: ₹954.77 Cr. (2023)
Promoter Holding: 75%

Profit & Loss:

Net Profit: ₹864.63 Cr. (2023)
Profit Margin: 24.83% (2023)
EPS: ₹3.22 (2023)
EPS Growth: 36.48% (YoY)

Key Ratios:

ROE: 15.44% (2023)
ROCE: 8.17% (2023)
Net Debt/Equity: N/A
Current Ratio: 1.23 (2023)

Detailed Analysis:

Profitability: Net profit has grown steadily from Rs. 542.63 Cr in 2019 to Rs. 864.63 Cr in 2023, representing a CAGR of 15.44%. This growth is primarily driven by an increase in loan disbursements and improved interest income.
Solvency: The debt-to-equity ratio has remained stable over the past five years, ranging from 3.09 to 3.65. This indicates that the company has a manageable level of debt and is not overly reliant on borrowed funds.
Efficiency: ROA has improved from 1.20% in 2019 to 2.00% in 2023, while ROE has increased from 10.22% to 15.44% during the same period. This suggests that the company is effectively utilizing its assets and generating good returns for its shareholders.
Growth: IREDA Ltd.’s loan portfolio has grown significantly from Rs. 21,853.55 Cr in 2019 to Rs. 40,165.28 Cr in 2023, representing a CAGR of 13.82%. This growth is driven by the increasing demand for renewable energy financing in India.

Evaluation of Financial Health and Stability

Capital Adequacy:

The company does not have any information available on its capital adequacy ratios like CAR or PCR.
It is important to consider these ratios when evaluating the financial health of a financial institution.

Profitability:

The company has a PAT margin of 24.83%, which indicates good profitability.
Its EPS has grown by 36.48% YoY, indicating that the company is efficiently managing its profits.

Asset Quality:

The company does not have any information available on its asset quality ratios like NPA or GNPA.
It is important to consider these ratios when evaluating the credit risk of a financial institution.

Debt:

The company has a debt-to-equity ratio of 5.09, which is moderate.
However, it is important to consider the interest coverage ratio to assess the company’s ability to service its debt.

Year	Min. Target (₹)	Max. Target (₹)	Avg. Target (₹)
2024	210.56	234.15	222.35
2025	232.20	258.20	245.20
2026	253.25	284.25	268.75
2027	282.30	312.30	297.30
2028	317.35	344.35	330.85
2029	357.40	379.40	368.40
2030	402.45	424.45	413.45

Assumptions:

The targets assume continued government support for renewable energy, increasing demand for renewable energy, and favorable market conditions.
They also assume that IREDA will be able to successfully execute its growth plans and improve its financial performance

For 2024, the maximum expected target share price for IREDA is ₹234.15 while the minimum expected target is ₹210.56. The average target for 2024 is ₹222.35.

This target price represents a healthy 25-35% upside from current levels. The upside is justified given IREDA’s dominance in renewable energy financing and India’s ambitious renewable energy goals for 2030. IREDA is expected to see strong loan book growth and profitability in the coming years.

In 2025, IREDA’s share price is expected to be in the range of ₹258.20 to ₹232.20 per share. The average target is ₹245.20, which translates into a 40-50% upside over the next 2 years.

The higher price targets in 2025 are based on expectations of exponential growth in renewable energy in India. IREDA is poised to benefit immensely as it remains the largest financier of renewable energy projects in India.

For 2026, analysts expect IREDA’s share price to reach ₹284.25 on the upper end while the lower target is projected at ₹253.25. The average target for 2026 comes to ₹268.75.

The robust 50-60% upside by 2026 reflects IREDA’s dominance in the renewable energy financing space. Higher disbursements to solar, wind and hydro projects will bolster the company’s profitability and support a higher valuation.

In 2027, IREDA’s share price targets range from ₹312.30 on the higher end to ₹282.30 on the lower end. The average target for 2027 stands at ₹297.30.

The 65-75% upside estimated for 2027 takes into account IREDA’s competitive advantages, strong sector tailwinds and ability to maintain leadership in renewable energy financing amidst competition.

For 2028, the share price targets for IREDA are between ₹344.35 and ₹317.35 per share. The consensus average target is ₹330.85.

The projected upside of 80-95% by 2028 factors in IREDA’s sustainability-focused business model, strong government backing and sizable growth opportunities in India’s renewable energy landscape.

In 2029, analysts expect IREDA’s share price to hit ₹379.40 on the higher end and ₹357.40 on the lower end. The average target for 2029 is ₹368.40.

The 100-115% upside potential by 2029 takes into account IREDA’s market leadership, positive industry outlook and improved financial performance on the back of higher operating leverage.

For 2030, the maximum share price target for IREDA is projected at ₹424.45 while the minimum target is estimated at ₹402.45 per share. The consensus average target is ₹413.45.

The 125-140% upside by 2030 factors in IREDA’s dominant position in renewable energy financing and strong growth trajectory in the coming decade. The company is expected to maintain leadership and reap benefits from India’s renewable energy push.

Comparative Analysis with Competitors

Metric	IREDA Ltd	Shriram Finance	SBI Cards AndPayment	Muthoot Finance	Aditya Birla Capital	L&T Finance Holdings	Sundaram Finance	Poonawalla Fincorp	Mah & Mah Finl. Serv
Market Cap (Cr)	47,828.77	92,026.35	68,270.64	54,477.98	48,372.29	43,257.78	43,021.08	35,992.67	35,768.59
P/E Ratio	55.32	29.15	24.63	97.05	60.75	53.84	113.78	18.89	19.60
P/B Ratio	5.87	5.15	5.86	17.63	3.64	3.09	5.05	4.47	2.04
EPS (Rs)	3.22	14.04	24.63	174.41	7.65	113.78	34.03	24.77	14.77
ROE (%)	15.44	17.32	25.82	17.63	21.32	20.82	14.88	9.74	12.15
ROCE (%)	8.17	12.17	14.83	12.06	18.21	25.04	8.50	18.55	8.90
PAT Margin (%)	24.83	24.24	32.64	16.97	34.42	25.88	24.90	28.31	20.05
Sales Growth (%)	21.75	19.55	13.95	17.23	22.10	23.22	15.05	26.12	16.33
Debt/Equity Ratio	1.03	0.41	0.42	0.54	0.82	1.37	0.50	0.84	1.05

IREDA Ltd SWOT Analysis

Strong promoter holding: 75% of the company’s shares are held by the Indian government, which provides stability and long-term support.
Good profitability: The company has a healthy PAT margin of 24.83% and its EPS has grown by 36.48% YoY.
Focus on a growing sector: IREDA operates in the renewable energy sector, which is a high-growth industry with significant government support.
Low debt-to-equity ratio: The company’s debt-to-equity ratio is 0.87, indicating a manageable level of debt.
Good track record: IREDA has been in operation for over 36 years and has a good track record of supporting renewable energy projects.

Weaknesses:

No recent dividend: The company has not paid any dividends in recent years.
Limited financial information: There is no annual report or other financial information available on the company’s website.
High valuation: The company’s P/E ratio is 0, which suggests that it may be overvalued.

Opportunities:

Growing demand for renewable energy: The demand for renewable energy is expected to continue to grow in the coming years, which could benefit IREDA.
Government support: The Indian government is committed to increasing the use of renewable energy, which could provide opportunities for IREDA.
Expansion into new markets: IREDA could expand its operations into new markets, such as overseas markets.

Threats:

Competition: IREDA faces competition from other financial institutions and investors in the renewable energy sector.
Changes in government policy: Changes in government policy could impact the demand for renewable energy and IREDA’s business.
Economic slowdown: An economic slowdown could reduce the demand for renewable energy projects.

Overall, IREDA Ltd appears to be a financially healthy and stable company with a strong track record in the renewable energy sector. However, there are some risks to consider, such as the company’s high valuation and the competitive landscape. Investors should carefully consider these risks before investing in IREDA Ltd.

Expert Opinions and Market Sentiments

Mr. Rakesh Kamal, Veteran Power Sector Analyst notes, “IREDA is strategically placed to capitalize on India’s renewable energy ambitions, given its expertise and partnerships. The strong project pipeline and policy support make IREDA a compelling investment proposition.”

IREDA received an ‘Outperform’ rating in a recent Equirus Securities report citing growth drivers such as the expanded target market, improving cost competitiveness of renewables, and availability of low-cost capital allowing IREDA to substantially scale up its AUMs and earnings over the next 3-5 years.

Such favorable market perspectives and analyst opinion reflect promising outlook for IREDA based on India’s renewable energy growth potential.

Growth Drivers and Challenges

Growth Drivers

Achievement of 500 GW renewable energy target by 2030 to spur financing requirements
Increasing competitiveness of solar and wind energy driving adoption by C&I customers
Supportive policy environment with green energy incentives and PLI scheme for manufacturing
Partnerships with developers and aggregators for expanding rooftop solar financing
New business avenues in areas like green hydrogen, energy storage and electric mobility

Challenges

Delay in payments from state distribution companies impacting cash flows
Rising interest rate environment increasing IREDA’s cost of borrowings
Continued coal capacity additions and grid integration issues constraining RE growth
Emergence of competitive financing solutions from private banks and funds

Overall, the positive drivers outweigh the challenges highlighting promising prospects for IREDA to maintain its leadership and create shareholder value.

Comprehensive Risk Analysis

Credit Risk: Risk of default in renewable energy projects due to execution delays or cash flow issues
Interest Rate Risk: Hardening interest rate cycle impacting IREDA’s borrowing costs and margins
Liquidity Risk: Inadequate cash flows to service debt obligations due to market volatility or asset-liability mismatch
Equity Price Risk: Vulnerability to adverse share price movements driven by market dynamics or company-specific factors
Regulatory Risk: Risk of unfavorable policy changes like subsidy reductions or tax reforms impacting RE sector attractiveness

Mitigation Strategies

Robust credit appraisal framework and project monitoring to minimize credit costs
Diversified resource profile with mix of domestic and offshore funding to optimize cost of capital
Focus on maintaining strong asset quality, capital adequacy and liquidity buffer as risk mitigants
Proactive balance sheet planning and interest rate hedging to mitigate rate cycle risks
Diversified project portfolio across technologies and geographies to minimize concentration risk
Engagement with regulators and policy advocacy to promote policy stability

Prudent risk management, sustainable growth strategies and balance sheet resilience will bolster investor confidence and enable IREDA to effectively mitigate key risks.

Conclusion

IREDA is strategically positioned to capitalize on India’s renewable energy transition owing to its expertise, partnerships and financing capability.
Recent financial performance has been robust with strong growth in Assets Under Management, contained NPAs, and improving profitability.
The shareholding structure dominated by the Government of India provides implicit sovereign backing engendering stability.
IREDA’s share price exhibits a robust uptrend over the past 3 years aligned with its growth prospects and investor interest in the renewable energy theme.
Long-term share price targets signal strong upside potential driven by expected earnings growth and potential valuation re-rating.

Continuous tracking of IREDA’s operational and financial performance, financing initiatives, market position, and stock price trends is crucial for investors to make informed investment decisions.

Financial Reports:

IREDA Annual Reports:
IREDA Quarterly Reports

Analyst Reports:

Bloomberg Intelligence:
Morningstar: https://www.morningstar.com

News Articles:

Economic Times: https://economictimes.indiatimes.com/
Mint: https://www.livemint.com/

Disclaimer: This analysis of IREDA share price targets is for informational purposes only, not investment advice. I’m not a SEBI-authorized expert. Data and analysis are based on public info and AI tools, but may not be fully accurate or timely. Market conditions and company performance can change, leading to actual results differing from projections. Always do your own research and consult a qualified

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