IREDA stock price jumped in early trades as the public sector infrastructure finance major announced impressive quarterly results. In a decisive reversal of recent bearish sentiment, Indian Renewable Energy Development Agency (IREDA) witnessed a sharp rally in its share price, surging over 5% in early trading to touch an intraday high of Rs. 179. The spike followed the announcement of the company's Q4 FY24 results, which showcased a significant jump in profitability and revenue. Consolidated net profit soared 48.66% year-on-year to Rs. 501.55 crore, supported by a 36.93% rise in revenue from operations, which touched Rs. 1,905.06 crore. Although operating margins slightly contracted and the net profit margin remained steady, the report was largely in line with market expectations, triggering optimism across the investor spectrum.

Strong Revenue Growth Anchored by Rising Interest Income

Revenue from operations rose 36.93% YoY in Q4 FY24, reaching Rs. 1,905.06 crore. This performance was largely attributed to a sharp jump in interest income, which increased by 40% to Rs. 1,861.14 crore.

The company, operating as a dedicated non-banking financial institution for the renewable energy sector, continues to see expanding demand for green infrastructure funding.

This rise in core income is indicative of growing credit demand within India’s renewable energy ecosystem, with IREDA positioned at the heart of this strategic energy shift.

Profitability Boost Despite Marginal Margin Pressure

IREDA's consolidated net profit grew 48.66% YoY to Rs. 501.55 crore in Q4 FY24, while profit before tax (PBT) stood at Rs. 629.98 crore, marking a 31.33% increase.

While net profit margin held steady at around 25.14% for FY25, the operating margin saw a slight decline from 33.92% in FY24 to 31% in FY25, reflecting higher operating costs.

However, the company's net interest margin improved significantly from 2.85% to 3.27%, suggesting effective cost management despite a rise in finance expenses and employee benefit costs.

Asset Quality Improvement Provides Confidence

One of the key takeaways from the Q4 performance is the substantial improvement in IREDA’s asset quality.

The net non-performing assets (NPA) ratio declined to 0.99% in Q4 FY24 from 1.5% in the previous quarter. This indicates better credit risk management, a critical factor for NBFCs.

Gross NPA ratio also eased to 2.45%, underscoring enhanced loan book quality and prudent underwriting practices. However, it's worth noting that asset quality as of March 31, 2025, slightly increased YoY to 1.35%, compared to 0.99% as of March 2024.

Cost Pressures Evident, Yet Under Control

IREDA’s total expenses rose 41% YoY to Rs. 1,285.91 crore in Q4 FY24.

The finance cost climbed to Rs. 1,103.74 crore, marking a 30.27% YoY increase, a reflection of a higher borrowing base. Meanwhile, employee benefit expenses rose to Rs. 21.44 crore (up 12.55%), indicating expansion in workforce and possibly retention strategies.

Interestingly, CSR expenses dropped by 62.41% YoY to Rs. 6.30 crore, contributing marginally to the overall expense rationalization.

Investor Sentiment Turns Positive After Rough Patch

Ahead of the Q4 results, IREDA stock had already surged 9% in the previous trading session, pricing in expected strong numbers.

Following its earnings announcement, the stock has gained close to 20% in the past month. Still, IREDA remains down 24% year-to-date, suggesting that investor confidence is still recovering from earlier market skepticism.

Given its robust Q4 performance and improved fundamentals, market participants are showing renewed confidence in the stock.

Strategic Role in India’s Renewable Energy Transition

IREDA, a 'Navratna' government enterprise, plays a pivotal role in funding India’s clean energy ambitions.

Established in 1987, IREDA operates under the Ministry of New and Renewable Energy (MNRE) and supports the development of renewable energy and energy efficiency projects.

As of December 2024, the Government of India held a 75% stake in the company, reinforcing investor confidence in its policy-driven mission and long-term funding potential.

Outlook: Positioned for Long-Term Growth

While Q4 results underline IREDA’s solid financial footing, the bigger story lies in its strategic positioning.

As India rapidly scales up its renewable energy targets, institutions like IREDA will play an instrumental role in mobilizing capital and bridging financing gaps in the sector.

Improved asset quality, higher interest income, and consistent government support provide a strong base for the company’s long-term growth narrative.

Long Term Investors Can Hold

IREDA’s fourth-quarter results were a clear affirmation of its resilient operational framework and rising relevance in India’s green transition. With a robust rise in profits, expanding net interest margins, and improved asset quality, the company has once again reinforced its value proposition to investors. Despite lingering concerns around operating margin compression and stock underperformance earlier this year, the recent upward price action suggests that sentiment is now shifting favorably. As a leading public sector financial institution, IREDA is well-positioned to capitalize on India’s ambitious renewable energy roadmap—making it a key stock to watch in the sustainability-focused investment universe.