IREDA Ltd’s shares are expected to garner attention in the Indian stock market when trading resumes after the weekend, following the announcement of the company being conferred ‘Navratna status’ by the Government of India (GoI).
This designation, revealed by the Department of Public Enterprises (DPE) on April 26, 2024, is seen as a significant development for IREDA. Market analysts suggest that the ‘Navratna’ status will streamline the company’s project execution processes, eliminating the need for certain government approvals, especially concerning joint ventures (JVs) both domestically and internationally.
The move is anticipated to expedite IREDA’s business operations, particularly in the renewable energy sector, following its strong performance in the fourth quarter of the fiscal year 2024.
According to Sandeep Pandey, Founder of Basav Capital, the ‘Navratna’ status will empower IREDA to undertake projects more swiftly, especially in the solar and alternative energy domains. This recognition also signals the company’s pivotal role in the government’s green energy initiatives.
Similarly, Shreyansh V Shah, Research Analyst at StoxBox, views the ‘Navratna’ status as a positive step, enabling IREDA to explore new partnerships and ventures domestically and internationally. This designation is expected to accelerate the financing of renewable energy projects, both in India and globally, with disbursements likely to become more expedited, especially for investments up to ₹1,000 crore.
While analysts anticipate a positive market response to this development, caution is advised regarding the stock’s valuation. Despite IREDA’s strong financial performance in the past, slight operational discrepancies could lead to significant market reactions, as per StoxBox.
In light of these developments, experts like Sandeep Pandey suggest considering IREDA shares for long-term investment, forecasting a potential rise of 15 to 25 percent in the share price over the next year.
IREDA recently announced robust fourth-quarter results for the fiscal year 2024, with a net profit of ₹337.37 crore, marking a year-on-year growth of 33%. The company, recognized as India’s largest pure-play green financing NBFC, reported a substantial YoY growth of 44.83% in PAT, reaching an all-time high of ₹1252.23 crore.
