IREDA share price falls 5% after asset quality deteriorates in Q3

Shares of Indian Renewable Energy Development Agency (IREDA) Ltd. fell as much as 5% on Friday, January 10, after the state-run renewable energy financier reported its December quarter results after market hours on Thursday.

A bigger factor that may determine the share price reaction will be the deterioration in the company’s asset quality during the December quarter.

In absolute terms, IREDA’s Gross Non-Performing Assets (NPAs) rose 30.4% from the September quarter to ₹1,845.5 crore, while its Net NPAs increased by 53.75% sequentially to ₹1,024 crore.

In percentage terms, Gross NPA stood at 2.68% from 2.19% in September, while Net NPA stood at 1.5% from 1.04% in September.

Provision Coverage Ratio at the end of the December quarter stood at 44.5% from 52.9% in the previous quarter.

IREDA’s Net Interest Income (NII) during the quarter increased by 39% from last year to ₹622.25 crore, while its net profit grew by 27% to ₹425.4 crore.

Provisions for the quarter tripled from September to ₹104 crore.

Shares of IREDA are trading 5% lower on Friday at ₹205.75. The stock had declined 3% in Thursday’s trading session as well ahead of the results announcement, closing at the day’s low. The stock has already corrected 30% from its peak of ₹310.