IREDA Reports 36% Profit Decline in Q1, Files Insolvency Against Gensol; Asset Quality Deteriorates
IREDA reported a 36% year-over-year decline in Q1 net profit to ₹247.00 crore, despite a 36% increase in Net Interest Income to ₹691.00 crore. Loan sanctions rose by 28.50% to ₹11,740.00 crore, and disbursements grew by 31.10% to ₹6,981.00 crore. The loan book expanded by 27% to ₹79,960.00 crore. However, gross NPA increased to 4.13% from 2.45% in the previous quarter. IREDA has initiated insolvency proceedings against Gensol Engineering for a ₹730.00 crore exposure and reclassified another ₹783.34 crore loan as NPA following a court order.

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IREDA (Indian Renewable Energy Development Agency Ltd) has released its Q1 results, revealing a significant decline in profit despite growth in other financial metrics. The state-owned non-banking financial company, which focuses on financing renewable energy projects, reported mixed performance across various parameters.
Q1 Financial Performance
IREDA reported a 36% year-over-year decline in consolidated net profit for Q1, falling to ₹247.00 crore from ₹384.00 crore in the same period last year. However, the company's Net Interest Income (NII) showed strong growth, increasing by 36% to ₹691.00 crore. Interest income also saw a significant rise of 29%, reaching ₹1,909.00 crore.
Loan Sanctions and Disbursements Surge
Despite the profit decline, IREDA reported substantial increases in loan sanctions and disbursements. Loan sanctions for the first quarter rose by 28.50% compared to the same period last year, reaching ₹11,740.00 crore. Loan disbursements grew by an impressive 31.10% year-over-year, totaling ₹6,981.00 crore for the quarter.
Loan Book Expansion
The company's loan book has seen remarkable growth, reaching ₹79,960.00 crore. This represents a 27.00% increase compared to the previous year, underscoring IREDA's expanding role in India's renewable energy financing landscape.
Asset Quality Concerns and Legal Action
IREDA has taken significant legal action to address asset quality concerns. The company has filed insolvency proceedings against Gensol Engineering Ltd for loan default and irregularities. IREDA has recalled loans worth ₹510.01 crore and ₹218.95 crore against Gensol and its associate, respectively.
Further exacerbating asset quality concerns, IREDA's gross NPA rose to 4.13% in Q1 from 2.45% in the previous quarter. The company has initiated insolvency proceedings against Gensol Engineering for a ₹730.00 crore exposure. Additionally, another borrower's loan of ₹783.34 crore was reclassified as NPA following a court order. These developments highlight the significant challenges in maintaining asset quality in the renewable energy financing sector.
IREDA Q1 Key Metrics (Year-over-Year Comparison)
Metric | Q1 (₹ Crore) | YoY Growth (%) |
---|---|---|
Net Profit | 247.00 | -36.00% |
Net Interest Income | 691.00 | 36.00% |
Interest Income | 1,909.00 | 29.00% |
Loan Sanctions | 11,740.00 | 28.50% |
Disbursements | 6,981.00 | 31.10% |
Loan Book | 79,960.00 | 27.00% |
While IREDA continues to show strong growth in its loan book and disbursements, the significant drop in profit and the deterioration in asset quality highlight the challenges faced by the company. The rise in gross NPA and the legal actions against borrowers serve as a reminder of the risks inherent in the renewable energy financing sector, even as overall growth remains strong.
Investors and analysts will likely be closely monitoring IREDA's future performance, its management of asset quality, and its strategies to address the rising NPAs in light of these recent developments.
Historical Stock Returns for IREDA
1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
---|---|---|---|---|---|
+2.25% | +1.27% | -7.03% | -15.66% | -31.40% | +182.73% |