IREDA share price target 2024, 2025, 2026, 2027, 2030 prediction: Buy or Sell?

The Indian Renewable Energy Development Agency (IREDA) stands as a testament to India’s commitment to green energy. As a premier government-backed non-banking financial entity, established in 1987, IREDA’s mission has been to empower and finance renewable energy projects and equipment manufacturing across India. In this article, we will look at the IREDA share price target 2024, 2025, 2026, 2027, 2030.

In this comprehensive analysis, we delve into the nuances of IREDA’s stock performance and its potential as a green investment opportunity. Our expert insights aim to guide investors interested in contributing to sustainable energy while seeking promising returns.

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IREDA share price target 2024, 2025, 2026, 2027, 2030

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IREDA Share Price Live Chart

IREDA Share: Buy or Sell?

Competitors of IREDA Stock

IREDA stands as a key player in the renewable energy financing sector in India, contending with several notable NBFCs and banks. These competitors specialize in offering financial services and support for renewable energy projects and equipment manufacturing. Key competitors include:

1. Power Finance Corporation Limited (PFC): Operating under India’s Ministry of Power, PFC provides financial support to the power sector, including renewable energy initiatives. As of September 30, 2023, PFC’s loan portfolio is valued at Rs 3,69,112 crore, with 10.8% dedicated to renewable energy projects. The company’s market capitalization was Rs 38,789 crore as of December 5, 2023.
2. REC Limited: Another public sector entity under the Ministry of Power, REC mirrors PFC in offering financial assistance to the power sector, with a focus on renewable energy. Their loan portfolio totaled Rs 3,36,685 crore by September 30, 2023, allocating 9.4% to renewable energy. REC’s market capitalization stood at Rs 34,387 crore as of December 5, 2023.
3. India Infradebt Limited: This private sector infrastructure debt fund specializes in long-term financing for operational infrastructure projects, including those in renewable energy. As of March 31, 2023, India Infradebt’s loan portfolio was Rs 12,254 crore, with 37.4% allocated to renewable energy. Notably, it is not listed on stock exchanges.
4. Tata Cleantech Capital Limited (TCCL): A joint venture between Tata Capital Limited and the International Finance Corporation, TCCL focuses exclusively on renewable energy and energy efficiency projects. Their loan portfolio reached Rs 6,000 crore by March 31, 2023, fully dedicated to renewable energy. TCCL is also not listed on stock exchanges.
5. PTC India Financial Services Limited (PFS): As a subsidiary of PTC India Limited, PFS offers financing and advisory services for power and infrastructure projects, including those in renewable energy. Its loan portfolio was Rs 11,570 crore as of September 30, 2023, with 48.6% allocated to renewable energy. PFS’s market capitalization was Rs 1,467 crore as of December 5, 2023.

While IREDA competes with these entities, it maintains a unique position in the market, thanks to its dedicated focus on renewable energy, extensive experience and expertise, diverse and cost-effective funding sources, strong government connections, and a varied, high-quality loan portfolio.

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IREDA share price target 2024

The IREDA share price target in 2024 is expected to range from a minimum of ₹132.74 to a maximum of ₹157.84.

Growth Opportunity for IREDA Stock

IREDA is poised for remarkable growth in India’s burgeoning renewable energy sector, which is on the cusp of a substantial expansion. This growth trajectory is underpinned by several pivotal factors:

1. Proactive Government Initiatives and Policies: The Indian government aims to reach a monumental 450 GW in renewable energy capacity by 2030, a significant leap from the current 94 GW (as of September 30, 2023). This ambition is backed by various supportive initiatives such as the National Solar Mission, National Wind Energy Mission, National Bioenergy Mission, and the Green Energy Corridor Project, among others. These policies not only foster a conducive environment for renewable energy but also amplify the demand for financing in this domain.
2. Escalating Demand for Sustainable Energy: India’s growing population, urbanization, and economic progress fuel an ever-increasing energy demand. With per capita electricity consumption still below the global average, renewable energy emerges as a sustainable and cleaner alternative to traditional fossil fuels. By 2030, renewable sources are projected to contribute 40% of India’s electricity generation, underscoring the sector’s potential for energy security and independence.
3. Shift Towards Green Investments: There’s a notable shift in investor sentiment towards green investments, both within India and internationally. These socially responsible and environmentally friendly investments are appealing for their diversification, risk reduction, and long-term returns, in line with global climate change commitments. IREDA represents a compelling green investment avenue, poised to capitalize on the sector’s expected rapid growth and supported by various government and multilateral incentives.
4. Untapped Renewable Energy Potential: India’s geographical and climatic advantages present a substantial untapped potential in solar and wind energy, estimated at 750 GW and 302 GW, respectively. Yet, the current installed capacities of solar and wind energy stand at just 45 GW and 39 GW. This gap highlights the expansive potential in the renewable sector, where IREDA can play a crucial role in financing and driving this expansion, with its vision to lead in providing innovative and affordable financing solutions.

IREDA is strategically positioned for significant growth in India’s rapidly expanding renewable energy sector. This potential is bolstered by supportive government policies, the increasing demand for sustainable energy, the shift towards green investments, and the untapped potential in the sector.

IREDA share price target 2025

The IREDA share price target in 2025 is projected to fall within the range of ₹165.93 (minimum) to ₹197.30 (maximum).

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Strengths of IREDA Stock

IREDA stands out as a compelling investment choice in the renewable energy sector, thanks to its array of notable strengths:

1. Specialized Focus and Expertise: Unique among Indian NBFCs, IREDA solely dedicates itself to financing renewable energy projects and equipment manufacturing. With over 34 years in the field, the company boasts extensive experience and expertise. This deep industry insight covers market dynamics, customer needs, project risks, and the regulatory landscape. IREDA’s strong reputation and brand recognition in the sector are further cemented by numerous awards and accolades.
2. Diverse and Economical Funding Sources: IREDA benefits from a wide range of funding sources, both domestic and international. This variety enables the company to secure capital at competitive rates. Funding avenues include bonds, term loans, external borrowings, and grants, complemented by support from global financial institutions like the World Bank and the Asian Development Bank. Notably, IREDA’s funding costs have decreased from 8.3% in FY21 to 7.6% in FY23.
3. Robust Government and Regulatory Relationships: As a government-owned entity, IREDA enjoys the advantages of being a public sector undertaking. Its close ties with the Ministry of New and Renewable Energy and other governmental departments, along with regulatory bodies like the Central Electricity Regulatory Commission, bolster its operations. These relationships aid IREDA in facilitating the development and implementation of renewable energy projects and policies in India.
4. Diverse and High-Quality Loan Portfolio: IREDA’s loan portfolio is well-diversified across different renewable energy sectors, technologies, locations, customer types, and project sizes. As of September 30, 2023, the portfolio is predominantly composed of loans linked to solar energy, state utilities, wind power, and hydropower, accounting for 81.5% of outstanding loans. The portfolio’s quality is underscored by low non-performing assets (NPAs) and a high recovery rate, with gross NPAs at 2.4% and net NPAs at 1.4%, and a recovery rate of 99.8% in FY23.

IREDA’s unique position in the renewable energy sector makes it an attractive investment. Its focused expertise, diverse funding sources, strong governmental ties, and robust loan portfolio underscore its strength as a key player in renewable energy finance.

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IREDA share price target 2026

The IREDA share price target in 2026 anticipates a span from a minimum of ₹207.41 to a maximum of ₹246.63.

Weaknesses of IREDA Stock

While IREDA is a key player in the renewable energy financing sector, it faces certain weaknesses that could impact its growth and profitability:

1. Over-reliance on Renewable Energy Sector: IREDA’s business model is entirely reliant on the renewable energy sector. This lack of diversification means it’s vulnerable to sector-specific uncertainties such as policy shifts, technological changes, and environmental issues. Any downturn in the renewable energy sector could significantly impact IREDA’s performance and future prospects.
2. Competitive Pressure: IREDA competes with other NBFCs and banks in India, many of which have a larger scale, broader reach, lower funding costs, higher credit ratings, and superior access to capital markets. These competitors could potentially offer more favorable terms to borrowers, thereby gaining a larger share of the renewable energy financing market. IREDA also faces the threat of new market entrants and alternative financing options like green bonds and funds.
3. Regulatory and Compliance Challenges: As a financial institution, IREDA is subject to stringent regulations by bodies like the Reserve Bank of India and the Securities and Exchange Board of India. Compliance with environmental and social standards set by government and multilateral agencies is also mandatory. Any lapses in meeting these regulatory requirements could lead to penalties, legal challenges, and reputational damage.
4. Operational and Financial Risks: IREDA’s operations are susceptible to various risks, including borrower defaults leading to increased non-performing assets (NPAs) and decreased recovery rates. It also faces risks related to interest rate volatility, currency exchange fluctuations, liquidity issues, and cybersecurity threats. These risks can affect the company’s financial stability and operational integrity.

IREDA’s growth and profitability are challenged by its dependence on the renewable energy sector, competitive landscape, regulatory obligations, and inherent operational and financial risks.

IREDA share price target 2030

The IREDA share price target in 2030 is projected to have a target range between ₹506.36 (minimum) and ₹602.11 (maximum).

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SWOT Analysis of IREDA Stock

The SWOT analysis of IREDA Stock offers a comprehensive view of its position in the renewable energy sector:

Strengths:

• Renewable Energy Expertise: IREDA’s focused experience in the renewable energy sector is a significant asset.
• Diverse Funding Sources: The company benefits from access to various cost-effective funding options.
• Government and Regulatory Relationships: Strong ties with government and regulatory bodies enhance its operational framework.
• Quality Loan Portfolio: A diversified and high-quality loan portfolio stands as a testament to its robust financial health.

Weaknesses:

• Sectoral Dependence: Sole reliance on the renewable energy sector for revenue exposes IREDA to sector-specific risks.
• Market Competition: IREDA faces stiff competition from other financiers in the sector.
• Regulatory Challenges: Ongoing regulatory and compliance requirements pose potential risks.
• Operational and Financial Vulnerabilities: The company is susceptible to various operational and financial risks.

Opportunities:

• Supportive Government Policies: Initiatives and policies favoring renewable energy present growth opportunities.
• Demand for Clean Energy: The rising demand for sustainable energy opens new avenues.
• Green Investment Trend: Increasing investor interest in green investments could benefit IREDA.
• Sector Expansion Potential: The untapped potential in the renewable energy sector offers room for growth.

Threats:

• Sectoral Fluctuations: Any downturn in the renewable energy sector could impact IREDA adversely.
• Policy Volatility: Changes or uncertainties in policies could affect sector stability.
• Technological Shifts: Innovations in the sector may pose challenges.
• Environmental Concerns: Potential environmental issues within the sector could pose risks.

IREDA Stock presents a promising investment opportunity in the renewable energy sector, bolstered by its strengths and prospects. Nonetheless, the company must strategically navigate its weaknesses and external threats to achieve its goals and sustain its market position.

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IREDA Company Financials

IREDA’s financial performance over the last three fiscal years and the first half of FY24 is detailed below, with data drawn from the company’s official prospectus and stock exchange filings. This analysis covers key financial metrics including revenue, profit, assets, liabilities, and equity, among others.

Financial Performance Overview:

IREDA has demonstrated remarkable growth in revenue and profit over the last three years, continuing into the first half of the current financial year. This consistent upward trajectory is evident across various financial indicators, reflecting the company’s robust financial health and positive market performance.

Risks in the Future for IREDA

As IREDA navigates the future, it confronts several risks that could potentially influence its growth and profitability. Key areas of concern include:

1. Volatility in the Renewable Energy Sector: IREDA’s performance is closely tied to the dynamics of India’s renewable energy sector. A downturn in this sector, influenced by factors like demand-supply imbalances, policy shifts, or environmental challenges, could negatively impact the company’s loan portfolio, revenue, profit margins, and asset quality. This could lead to reduced demand for IREDA’s financial services, heightened competition, and diminished investment returns.
2. Policy and Regulatory Uncertainty: IREDA’s operations are significantly impacted by government policies and regulatory frameworks. Changes or ambiguities in these policies could disrupt the company’s operational strategies. For instance, regulatory alterations affecting its 50 MW solar project in Kerala1 and sensitivity to interest rate fluctuations2 pose substantial risks. Additionally, the company may face hurdles in adapting to new regulations, securing necessary approvals, and navigating legal disputes.
3. Technological Shifts and Innovations: The pace of technological advancement in renewable energy presents both opportunities and risks for IREDA. The emergence of newer, more efficient technologies could render existing projects less competitive or obsolete. Keeping up with these innovations may require substantial capital or operational investments, potentially affecting IREDA’s market position and financial health.
4. Environmental and Social Impact Concerns: IREDA must also be mindful of the environmental footprint of its projects. Risks include environmental degradation or pollution from project development and operation. Additionally, climate change and natural disasters could affect renewable resource availability. Social and community resistance to projects, due to perceived or actual environmental impacts, is another challenge.

Summary: IREDA’s future trajectory is marked by a spectrum of risks and challenges that require strategic navigation. To sustain growth and profitability, the company must focus on diversifying its portfolio, strengthening risk management, innovating its offerings, and ensuring compliance with environmental and social standards.

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Key Things to Watch Out for IREDA

IREDA offers an intriguing investment opportunity in the renewable energy sector, yet potential investors should be mindful of certain factors that could impact its performance. Key areas to monitor include:

1. Sector Growth and Government Initiatives: It’s crucial to track the overall development of India’s renewable energy sector and governmental policies supporting it. The government’s actions can significantly influence the sector’s trajectory and, by extension, IREDA’s operations.
2. Market Demand and Competitive Environment: Understanding the supply and demand dynamics for renewable energy projects and equipment in India is vital. Also, keeping an eye on the competitive landscape in renewable energy financing will offer insights into IREDA’s market positioning.
3. Technological Advancements: The renewable energy sector is rapidly evolving. IREDA’s ability to integrate and leverage new technologies, products, and services will be a determinant of its long-term success.
4. Environmental and Social Compliance: Observing how IREDA addresses environmental and social concerns, and adheres to related standards and safeguards, is crucial, as these factors increasingly influence investment decisions.
5. Financial Health: Evaluating IREDA’s financial metrics such as revenue, profitability, asset quality, and capital adequacy is essential for assessing its financial stability and growth potential.
6. Investor Returns and Stock Performance: Monitoring IREDA’s dividend policies, share price trends, and overall market valuation can provide insights into its attractiveness as an investment and its market perception.

Summary: While IREDA stands as a promising investment in the renewable energy arena, potential investors should keep a close eye on various factors impacting its operations and market standing. This vigilance will aid in making informed investment decisions.

Final Thoughts on IREDA share price target 2024, 2025, 2026, 2027, 2030

REDA Stock presents an attractive opportunity for those investing in India’s rapidly growing renewable energy sector. As the foremost financial supporter in this domain, IREDA stands out with its diverse loan portfolio that significantly fuels various renewable energy initiatives. The company’s notable growth curve, consistent profitability, and regular dividend distribution are testaments to its financial health and reputation in the market. Moreover, IREDA’s share price has consistently demonstrated strong performance since its listing, often surpassing peer valuations.

However, it’s important for investors to be mindful of the risks and challenges inherent in this sector that could influence IREDA’s future growth and profit margins. To maintain its ascending trend, it’s imperative for IREDA to leverage its strengths and seize emerging market opportunities effectively. Equally crucial is the company’s ability to mitigate weaknesses and tackle potential risks to achieve its long-term goals.

For those considering investment in IREDA Stock, a diligent and informed approach is essential. Keeping an eye on industry-specific trends, technological innovations, and adherence to environmental and social norms, alongside financial stability indicators, is vital in evaluating IREDA’s continuous prospects and aligning them with investment objectives.

To conclude, IREDA emerges as a promising investment choice within the renewable energy sector, supported by its robust financial standing and strategic market positioning. Nonetheless, prudent investment decisions should consider the company’s upcoming challenges and the dynamic nature of the renewable energy landscape.

FAQs on IREDA share price target 2024, 2025, 2026, 2027, 2030

What is the IREDA share price target 2024?

The IREDA share price target in 2024 is anticipated to vary between ₹132.74 as the minimum and ₹157.84 as the maximum.

What is the IREDA share price target 2025?

The IREDA share price target in 2024 is forecasted to range between ₹165.93 as the minimum and ₹197.30 as the maximum.

What is the IREDA share price target 2026?

The IREDA share price target in 2026 spans from a minimum of ₹207.41 to a maximum of ₹246.63.

What is the IREDA share price target 2030?

The IREDA share price target in 2030 is projected to have a target range between ₹506.36 as the minimum and ₹602.11 as the maximum.