IREDA share price: Experts see big upside in PSU stock after central government's 'Navratna' accord. Should you buy?
IREDA share price: The Navratna accord would enable the government-owned company to execute its projects and plans at a faster rate, say experts.
IREDA share price: Shares of Indian Renewable Energy Development Agency (IREDA) Ltd will be in focus on Monday when the Indian stock market reopens after the weekend close. The reason for this PSU stock to remain on focus is the latest ‘Navratna status’ being accorded to the state-owned company by the Government of India (GoI). The PSU company informed on Friday after the market close that the Department of Public Enterprises (DPE) has accorded ‘Navratna status’ to the company vide a letter dated 26th April 2024. According to stock market experts, this is a big development from the IREDA’s perspective as the ‘Navratna’ status would enable the government-owned company to execute its projects and plans at a faster rate. Now, IREDA won’t require any government approval on certain JVs in India and overseas. They said that after the strong IREDA’s Q4 results 2024, this GoI’s accord is a big development for the company and its shares. They gave a ‘portfolio stock’ tag to the IREDA shares.
IREDA news
On how ‘Navratna’ status would impact the business of the PSU company, Sandeep Pandey, Founder of Basav Capital said, “A PSU company requires certain approvals from the central government for executing and implementing its projects. It also requires the government’s nod to partner with any domestic or international player. But, after the ‘Navratna status accord, it won’t require such approvals on certain JVs and projects, which is going to accelerate the company’s business activities in the coming quarters. I am expecting a rise in the order book of the company as the company is aggressively foraying into solar and other alternative sources of energy. The ‘Narvratna’ status given by the GoI also signals that the company is going to play a major role in the central government’s bid to its commitments in the green energy segment.”
Expecting sharp momentum in IREDA’s business activities after the ‘Navratna status’ accord, Shreyansh V Shah, Research Analyst at StoxBox said, “We believe that the government granting Navratna status to IREDA is a step in the right direction as it would open up avenues for the company to forge JVs, partnerships and overseas subsidiaries, thereby widening the opportunity in financing projects related to renewable energy in India as well as globally. Also, we expect disbursements to be faster as investments up to ₹1,000 crores would now require no prior approval from the central government.”
“We expect IREDA shares to react positively to this development on Monday. Though the company has posted strong financials in the past, we find the valuation of the company rich and any marginal misses on the operational performance front could result in a major downside reaction in the stock,” the StoxBox expert said.
Giving a ‘portfolio stock’ tag to IREDA shares, Sandeep Pandey of Basav Capital said, “IREDA shares can be added to one’s portfolio for the long-term as IREDA share price may rise from 15 to 25 percent in the next one year.”
IREDA Q4 results 2024
On 19th April 2024, IREDA declared its Q4 results for the financial year 2024. In Q4 results 2024, the PSU company declared an impressive number during the recently ended March 2024 quarter both sequentially and yearly. The state-owned company reported a net profit of ₹337.37 crore in Q4FY24, logging a YoY growth of 33% against the company’s net profit in Q4FY23. India’s largest pure-play green financing NBFC reported YoY growth of 44.83 percent in PAT (Profit After Tax) and climbed to an all-time high of ₹1252.23 crore.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.