Indian Renewable Energy Development Agency, commonly known as IREDA, was listed on the NSE on November 29, 2023. Since listing, the company has given a massive return of more than 200% to its investors. Will Ireda continue to provide such great returns in the future as well? Let’s explore IREDA growth potential and IREDA share price target from 2025 to 2050 in this article
About IREDA
IREDA (Indian Renewable Energy Development Agency) is an Indian government-owned company that promotes renewable energy in India. It was founded in 1987 with the objective of promoting the growth of renewable energy projects such as solar, wind, and hydropower. IREDA offers financial support and loans to both private and public-sector companies working on green energy efforts. The organization is critical to India’s efforts to reach renewable energy targets and reduce its dependency on fossil fuels. Ireda also aims to promote sustainable energy practices and technologies throughout the country.
IREDA Business Model
- Providing Loans for Renewable Projects: IREDA gives loans to companies that are constructing renewable energy projects like solar, wind, and hydro.
- Interest on Loans: IREDA’s primary source of income is the interest it charges on loans to renewable energy companies.
- Promoting Government Schemes: IREDA gets money by acting as an investor for government renewable energy projects and schemes.
IREDA Fundamental Analysis
| Stock Name | IREDA Ltd. |
|---|---|
| Market Cap | ₹ 52,503 Cr. |
| 52W High | ₹ 310 |
| 52W Low | ₹ 121 |
| Stock P/E (TTM) | 34.2 |
| Book Value | ₹ 34.7 |
| Dividend Yield | 0.00 % |
| ROCE | 9.30% |
| ROE | 17.3 % |
| Face Value | ₹ 10.0 |
| Shareholders | Jun 2024 | Sept 2024 | Dec 2024 |
|---|---|---|---|
| Promoters | 75.00% | 75.00% | 75.00% |
| FIIs | 2.70% | 2.02% | 1.85% |
| DIIs | 0.42% | 0.35% | 0.63% |
| Public | 21.87% | 22.62% | 22.51% |
| No. of Shareholders | 22,43,293 | 26,16,555 | 26,19,358 |
Key Factors Driving IREDA Future Growth
- Government Support: IREDA benefits from government plans to increase renewable energy use in India, which creates more opportunities for growth.
- Rising Demand for Green Energy: As India focuses more on clean energy, IREDA will see more projects needing financial support.
- Growth in Renewable Projects: The increase in renewable energy projects, such as solar and wind, means IREDA will have more chances to provide funding.
- Focus on Sustainable Development: More investment in green infrastructure will lead to more business for IREDA as it finances such projects.
- Expanding Rural Projects: IREDA is helping rural areas with renewable energy solutions, which will increase its market in these regions.
- Technological Advancements: New and better renewable energy technologies will require financing, creating growth opportunities for IREDA.
Pros of Investing in IREDA
- Rising Revenue and Profit: IREDA revenue and profit are continuously increasing on QOQ and YOY basis in every quarter.
- Wide Loan Portfolio: With a loan book of ₹69,000 crore as of December 2024, IREDA is a leader in green financing.
- Stable Profit Growth: Over the last three years, IREDA has shown a 58% CAGR in Profit After Tax, indicating solid financial success.
- Government Support: IREDA gains from government efforts to boost India’s renewable energy potential, which creates an optimal growth environment.
- Positive Outlook for the Future: According to analysts, IREDA’s share price has a strong growth potential and is expected to reach ₹1100 by 2030.
Cons of Investing in IREDA
- High Price-to-Earnings (P/E) Ratio: IREDA’s P/E ratio is 33.63, which is higher than some of its competitors, such as Power Finance Corp. (PFC) and REC. A high P/E ratio may indicate that the stock is overvalued relative to its peers.
- Dependence on Government Policies: IREDA’s business is heavily influenced by government policies and activities in the renewable energy field. Any changes to these policies may have an impact on IREDA’s operations and financial performance.
- Interest Rate Sensitivity: IREDA’s financial performance is subject to interest rate movements. An increase in interest rates could reduce its net interest income and overall profitability.
- Asset Quality Risks: While IREDA has successfully reduced its non-performing assets (NPAs), a rise in asset quality might harm the organization’s financial stability and investor returns.
| Years | Target Price |
|---|---|
| IREDA Share Price Target 2025 | ₹250 to ₹300 |
| IREDA Share Price Target 2026 | ₹300 to ₹390 |
| IREDA Share Price Target 2027 | ₹360 to ₹510 |
| IREDA Share Price Target 2028 | ₹430 to ₹660 |
| IREDA Share Price Target 2029 | ₹520 to ₹860 |
| IREDA Share Price Target 2030 | ₹650 to ₹1100 |
| IREDA Share Price Target 2035 | ₹1300 to ₹3350 |
| IREDA Share Price Target 2040 | ₹2800 to ₹10000 |
| IREDA Share Price Target 2050 | ₹11500 to ₹50,000 |
Conclusion
IREDA plays an important role in promoting renewable energy in India. It supports the growth of solar, wind, and other clean energy projects through loans and financial assistance. While IREDA has strong government support and a growing market, there are risks like high stock prices and its dependency on government policies. Investors should consider both the potential for growth and the risks involved before investing in IREDA. For more information and the latest financial results, you can visit IREDA official website.
Disclaimer
This article is for educational purposes only. It is not a stock recommendation and should not be treated as such. Please ask your financial advisor before making any investment decision.
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