Key Facts: – Strong Earnings: IREDA’s standalone net profit for Q2 FY2026 (July–Sept) was ₹549 crore, up ~42% YoY, on revenue of ₹2,057 crore (+26%) [1].
- Loan Growth: Loan sanctions surged to ₹21,408 crore (+145% YoY) and disbursements to ₹8,062 crore (+81%) in Q2, lifting the outstanding loan book to ₹84,477 crore (+31%) [2].
- Market Reaction: Shares jumped about 3.7% after the results (trading near ₹155) [3], although the stock is still roughly 30% below its 2025 peak [4].
- Capital Raise: In September 2025 IREDA raised ₹453 crore via a 7.70% perpetual bond issue, bolstering its Tier-1 capital [5].
- Green Energy Focus: IREDA is a government-owned (Navratna) NBFC under India’s MNRE, solely financing renewable energy projects [6]. Its growth is tied to India’s push for 500 GW of clean power by 2030 [7].
Robust Q2 Performance
New Delhi: Indian Renewable Energy Development Agency (IREDA) – a government-owned NBFC focused exclusively on clean energy – delivered strong Q2 results on Oct 14, 2025. The PSU reported standalone net profit of ₹549.33 crore (up 41.7% YoY) for July–Sept 2025, compared to ₹387.75 crore a year ago [8]. Revenue from operations rose 26% to about ₹2,057 crore [9]. These gains were driven by higher interest income: net interest income jumped nearly 50% YoY to around ₹817 crore, and operating profit soared ~55% to ₹766 crore [10].
IREDA Chairman & Managing Director Pradip Kumar Das lauded the results as proof of strong execution. He noted that “IREDA’s consistent growth across quarters underscores our strategic focus and execution excellence. Our expanding loan book and strong financials… highlight our role as a key enabler in India’s clean energy ecosystem” [11] [12]. In short, the Q2 performance continued IREDA’s solid track record: for H1 FY26 the company earned about ₹796 crore (vs ₹771 cr a year ago), with total income of ₹4,017 crore (vs ₹3,141 cr) [13].
Surging Loan Growth and Healthy Assets
The standout feature of IREDA’s results was the expansion of its loan portfolio. The company sanctioned ₹21,408 crore of new loans in Q2 – 145% higher than a year earlier – and disbursed ₹8,062 crore (+81% YoY) [14]. This helped push the outstanding loan book to ₹84,477 crore, up 31% from ₹64,564 crore in Q2 FY25 [15]. By the end of Sept. 2025 IREDA’s net worth was ₹12,920 crore, 38% higher than the previous year’s ₹9,336 crore (reflecting retained earnings) [16].
Despite the rapid growth, asset quality remains sound. Net NPAs stayed below 1%: as of Sep 30, gross NPA was ~1.37% (versus 1.19% a year ago) and net NPA ~0.91% (versus 0.64%) [17]. Provision coverage was strong (over 100% of net NPAs). The capital adequacy ratio was a comfortable 16.10% (up from 15.84% YoY) [18]. IREDA’s debt-to-equity ratio has also improved to 5.41 (from 5.85 a year ago) [19]. In short, the company is growing fast but keeping credit risk well under control.
Funding and Government Support
IREDA’s growth is underpinned by strong government backing. In September 2025, it raised ₹453 crore through its second issue of perpetual bonds (7.70% coupon) [20]. The issue was oversubscribed (2.7x), reflecting investor confidence. “These bonds will strengthen our Tier-I capital and help scale up renewable energy financing, accelerating India’s transition to a greener and more sustainable future,” said IREDA CMD Pradip Das [21]. This fresh capital boost, along with retained earnings, positions IREDA to fund more projects across solar, wind, hydro, green hydrogen and other clean-tech segments.
As a “Navratna” PSU under the Ministry of New & Renewable Energy, IREDA enjoys strategic advantages. According to analysts, it can access government-subsidized funds (like Section 54EC bonds) at 250–350 basis points below market rates [22]. The government owns roughly 72% of IREDA’s equity [23], giving implicit state support. (For context, IREDA’s credit rating is very strong – AAA domestic.) The company itself has set ambitious medium-term goals: it aims to disburse about ₹5 trillion in green loans by 2030 (implying ~20% annual growth) [24], riding on India’s clean energy targets.
Stock Reaction & Market Outlook
IREDA’s market reaction has been mixed. On Oct 14, the stock jumped as much as 3.7% (to ₹155.59) on the earnings release [25], rewarding investors for the blowout quarter. However, the share is still far from its January 2025 peak (about ₹234) and even its March trough (~₹137) [26]. Over the past six months the stock has fallen ~7.6%, and on a YTD basis it’s down roughly 30% [27]. In other words, the Q2 news provided a relief rally, but the stock remains subdued after a year of volatility.
Street analysts say IREDA looks undervalued relative to its growth prospects, but expect it to stay range-bound in the near term. Technical analysts have identified key support around ₹137–153 and resistance near ₹157–163 [28]. From a fundamental viewpoint, IREDA’s price-to-earnings ratio is in the mid-20s, similar to diversified NBFCs (though its peers REC and PFC trade at much lower P/Es since they have legacy thermal portfolios). Some brokerages note that the stock may gradually recover as the broader renewable sector sentiment improves.
Powering India’s Clean Energy Push
Beyond the numbers, IREDA’s results highlight India’s accelerating renewable energy drive. The company’s only business is to lend to solar, wind, small hydro, biogas and other green projects, making it a barometer of the energy transition. Government ministers and global experts say the momentum is unmistakable. For example, MNRE Minister Pralhad Joshi recently reiterated that India is “on track” to achieve 500 GW of non-fossil capacity by 2030 [29] – a target that implies massive new project funding over the coming years. IREDA even signed a performance MoU with MNRE in Aug 2025 setting an FY26 revenue-from-operations target of ₹8,200 crore (well above the ₹6,743 cr achieved in FY25) [30].
Internationally, the tailwinds are just as strong. As TechStock² analyst points out, IEA Executive Director Fatih Birol emphasized that global investment in the energy sector has hit a record $3.3 trillion in 2025 – driven largely by clean energy and energy-security concerns [31]. In this context, IREDA’s business – financing renewables – is well-positioned to benefit. “Energy security is coming through as a key driver of growth,” Birol said [32]. In practical terms, every major solar farm or wind park built in India may rely on IREDA loans or guarantees. The company’s focus on emerging areas like green hydrogen and grid storage (which will require hundreds of gigawatts of capacity by 2030 [33] [34]) suggests it has room to expand its footprint far beyond current levels.
In summary, IREDA’s Q2 FY26 results demonstrate both strong execution and alignment with broader energy goals [35] [36]. The net profit and loan growth were exceptional, management is optimistic, and global trends are favoring green energy finance [37]. Investors will now watch how policy developments (e.g. clean energy incentives) and project pipelines unfold. But for now, the earnings have underlined IREDA’s key role in India’s renewable-energy story – a theme that analysts and officials alike believe is only beginning to play out.
Sources: Official IREDA FY26 Q2 results (PIB release) [38] [39]; business press and market reports [40] [41] [42] [43] [44] [45].
References
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