Posted on March 25, 2025, by Niftynews
IREDA Shares have surged an impressive 28% in just six trading sessions, reaching Rs 176.80 on Tuesday. This remarkable rally has boosted IREDA market capitalization to nearly Rs 46,500 crore, capturing the attention of investors. However, with the significant price increase, many are wondering: should you book profits or hold onto your IREDA shares?
IREDA Shares – A Closer Look at the Performance
Despite this recent rise in IREDA shares, the stock is still down about 45% from its 52-week high of Rs 310, which was reached in July 2024. On a year-to-date basis, IREDA shares are down by 25%. However, they remain up by an impressive 450% from their IPO price of Rs 32 in November 2023.
The sharp recovery seen in IREDA stocks in the past few sessions indicates potential signs of a trend reversal. Experts at Geojit Financial Services have pointed out that momentum indicators, including the Relative Strength Index (RSI), have moved out of oversold territory and are currently positioned at 42. Additionally, the Moving Average Convergence Divergence (MACD) indicator has turned positive, hinting at a short-term price rebound for IREDA shares.
Will IREDA Shares Continue to Rise?
Technical analysts predict that IREDA shares could see further upward movement toward Rs 155, aligning with the 21-day moving average (DMA) and a previous key support level. If IREDA shares break above this resistance, it could pave the way for a potential rally towards Rs 178–182 in the coming sessions.
Expert Opinions on IREDA Share
Jigar S Patel, a Technical Research Analyst at Anand Rathi Shares and Stock Brokers, has highlighted that IREDA shares are encountering resistance at the R3 Camarilla pivot. Due to this overhead resistance, Patel suggests that investors consider booking profits to secure gains. He also mentioned that a fresh buying opportunity would emerge only if IREDA shares close above Rs 173 on the daily chart.
IREDA’s Financial Growth and Outlook
Looking beyond the recent surge, IREDA shares are backed by solid financial performance. The company’s loan book has seen a strong growth of 36% year-on-year, reaching Rs 68,960 crore in 9MFY25. This growth is largely attributed to a 41% increase in disbursements, totaling Rs 17,236 crore. Moreover, IREDA’s asset quality has improved, with its Gross Non-Performing Asset (NPA) ratio decreasing to 2.68%.
With the Indian government’s ambitious target of achieving 500 GW of non-fossil fuel energy capacity by 2030, IREDA stocks are well-positioned to benefit from the significant expansion in the renewable energy sector. As of June 2024, the government plans to reach 195 GW, which will likely drive further demand for financing from IREDA.
Investment Sentiment and IREDA’s Future Projections
IREDA shares are currently trading at a 1-year forward price-to-book (P/B) ratio of 3.4 times, with return on assets (ROA) and return on equity (RoE) standing at 2.4% and 20%, respectively. Analysts are divided on the future of IREDA shares, with a target price of Rs 196 from some brokerage firms. However, others remain cautious and project lower targets.
RBI’s Revised Guidelines and Impact on IREDA Stocks
The Reserve Bank of India (RBI) recently announced changes to its priority sector lending (PSL) guidelines, which includes provisions for the renewable energy sector. This update could further support companies like IREDA, thereby benefiting IREDA stocks in the long term.
Conclusion
As IREDA shares show signs of recovery and offer potential for growth, investors should assess both technical indicators and financial fundamentals before making any decisions. While the recent surge is encouraging, profit booking could be a smart strategy at this stage, especially with the current resistance levels. Investors looking to re-enter should wait for a sustained breakout above key resistance levels.
