IREDA Share Price Slides 6% After Q1 Profit Falls 36%; Bad Loan Spike Raises Alarm

Market Performance

The share price of Indian Renewable Energy Development Agency (IREDA) fell sharply on July 11, registering a 6% intraday drop to ₹160 in morning trade. This decline follows a concerning financial report for the first quarter of FY25, where worsening asset quality offset positive growth in loan disbursements and total income.

The stock has now lost over 20% year-to-date and trades more than 40% below its all-time high of ₹310.

Main News: Q1 Profit Drops Amid NPA Surge

IREDA reported a 35.7% year-on-year decline in net profit, slipping to ₹247 Crore in the April–June quarter of FY25. The primary cause for the fall was a sharp deterioration in asset quality:

• Gross NPAs: Jumped to 4.13% (vs. 2.45% in Q4 FY24)
• Net NPAs: Rose to 2.05% (vs. 1.35% in Q4 FY24)

The spike in bad loans has raised investor concerns, particularly regarding IREDA’s loan exposure to Gensol Engineering, which is now undergoing insolvency proceedings.

Company Details & Gensol Exposure

IREDA’s financial health came under scrutiny after revelations about its exposure to Gensol Engineering:

• Total Exposure: ₹470 Crore
  • Term Loan: ₹254.9 Crore
  • Working Capital Lines: ₹215.7 Crore

Earlier this month, the National Company Law Tribunal accepted IREDA’s insolvency plea against Gensol. This move drew attention to the agency’s asset quality, which has long been considered a critical area of focus.

Financial Snapshot

Despite the dip in profit, IREDA saw strong operational performance in Q1:

Revenue

• Total Income: ₹1,947 Crore
• YoY Growth: +29%

Loan Activity

• Loan Sanctions: ₹11,740 Crore (↑28.5% YoY)
• Loan Disbursements: ₹6,981 Crore (↑31.1% YoY)
• Total Loan Book: ₹80,000 Crore (↑26.5% YoY from ₹63,207 Crore)

Summary of the Article

• IREDA share price declined 6% to ₹160 following a 36% YoY fall in Q1 net profit.
• Asset quality worsened, with Gross NPAs at 4.13% and Net NPAs at 2.05%.
• Concerns have escalated over a ₹470 Crore exposure to Gensol Engineering, which is now under insolvency proceedings.
• Despite profitability issues, IREDA posted substantial income and loan growth.
• The stock remains significantly off its highs, trading over 40% lower than its peak and down 20% YTD.