Investors Still Confused Over IREDA: Know What Are The Market Expectations?

PSU Energy Stock, IREDA has turned out to be a multi-bagger with the issue offer coming at Rs.32 in November month last year, The stock has given multi-bagger returns of around 426.6% from the issue price and currently trades at Rs.168 a piece as on 24th April,2024.

How Has The Stock Played?

After its listing at Rs.50 a piece, the stock consecutively made price increases and achieved a high of Rs.214.80 after which the stock saw a sharp fall of 43% from this high, the stock went as low as Rs.121 a piece. 

Recent Q4 Results

IREDA reported its Q4  results on Friday, The company reported a Bottom Line of Rs. 338 crores for the Quarter that ended March 31, 2024, as compared to Rs.253 crores for the Q4 FY 2022-23, A rise of 33% in net profits on YoY Basis has been seen.

Net Interest Income was reported at Rs.481.4 crores which grew to 35% from Rs.356.4 crores in the Q4FY 2022–23. The stock closed 6% above on the next day after the results were reported.

What is the Market expecting from IREDA Ahead? 

The stock has already given very lucrative returns since its IPO listing and results from the 2 quarters after its listing have also been good. Brokerage Phillip Capital has said that they expect IREDA to have a strong loan growth of 25% compounding annually over FY24-26 as of the rising demand for renewable energy space in India. 

Furthermore, they have added that the earnings growth is not anticipated to match the loan growth and say that it will be around 18-20%. The Brokerage has maintained a “Sell” call on the stock and targets of Rs.110 are given, the targets are raised from Rs.80 a piece to Rs.110 a piece now from the brokerage. 

Conclusion: With the stock having a very attractive run since its listing, confusion remains among retail investors whether to invest in the Mini Ratna company or not. The stock currently trades at 7 times its book value and has a Price to price-to-earnings ratio of 122 compared to the industry price-to-earnings ratio of 19.54. Even though the company has announced strong results, the stock is still sitting at higher values according to analysts.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.