01 — At a Glance
The Green Lender That’s Growing But Bleeding Red
- 52-Week High / Low₹187 / ₹112
- Q3 FY26 PAT₹585 Cr
- 9M FY26 PAT₹1,381 Cr
- Q3 FY26 EPS₹2.08
- Annualised EPS (9M avg)₹6.46
- Book Value₹46.0
- Price to Book2.48x
- Dividend Yield0.00%
- Debt / Equity5.41x
- 3-Month Return-12.8%
The Paradox: IREDA crushed Q3 with 38% profit growth, 44% disbursement surge, and a spanking new ₹88,000 crore loan book. Yet somehow the stock decided this was a good time for a correction. The market apparently prefers boring oil companies with high returns to high-growth green lenders with massive leverage. India’s renewable energy story is real. The stock’s chart tells a different story.
02 — Introduction
Navratna Status. ₹88,000 Crore Loans. Still Nobody’s Paying Dividends.
IREDA is the nation’s largest, most boring, and—paradoxically—most important renewable energy lender. Incorporated in 1987 under the Ministry of New and Renewable Energy, it’s a fully government-owned (71.76% as of Dec 2025) NBFC that finances everything from solar panels to wind turbines to immersion cooling systems for data centres that don’t exist yet.
The mandate is simple: throw money at renewable energy projects and hope the Government of India’s aggressive 500 GW non-fossil target by 2030 actually happens. Spoiler: it’s happening. As of Dec 2025, India had touched 254 GW. The gap is 246 GW. IREDA is quite literally in the business of funding that gap, one project at a time.
Here’s the twist: the company was granted Navratna status in April 2024 (upgraded from Mini Ratna), got classified as an Infrastructure Finance Company by the RBI in March 2023, and subsequently raised ₹2,150 crore via IPO in Nov 2023. The stock’s market debut was “remarkable”—which in stock market language means it went up and then got uncomfortable with the altitude.
Q3 FY26 saw ₹585 crore in PAT. Full-year EPS guidance would land around ₹6.32 (on the back of 9M results). The loan book stands at ₹88,000 crore. Gross NPA is 3.75%, which sounds bad until you remember lending to renewable energy projects is a portfolio where three mega defaults wipe out two years of profit margins. Welcome to infrastructure finance, where you fund a 500 MW solar park and pray the monsoons cooperate.
Management’s Vibe (Jan 2026 Concall): “We’re on track for 500 GW targets. Asset quality is normalizing after Q1 slippages. QIP of ₹2,994 crore approved for shareholder vote.” Translation: we’re raising more debt to fund more debt because that’s how leverage works.
03 — Business Model: WTF Even Is Green Financing?
You Have a Solar Project. We Have Money. It’s Complicated.
IREDA’s business is delightfully straightforward: lend money to renewable energy projects at a spread of ~2.63%. Collect interest. Pray the borrower doesn’t default. Repeat. Revenue is predominantly interest income (~97% in any given quarter). The remaining 3% is fees and other income. It’s textbook NBFC, except the loans are to projects that sometimes need 25 years to pay back and depend on wind patterns.
The loan book is diversified across sectors. Solar thermal/SPV leads at 25% (₹21,984 crore). Wind is 12% (₹10,320 crore). State utility loans account for 25% (₹17,413 crore for “others” plus ₹4,099 crore for GENCO). Ethanol, hybrid wind-solar, manufacturing, transmission, and emerging tech (smart meters, green hydrogen) fill the rest. Geographic presence? 23 states and 4 union territories. Basically everywhere India has electricity dreams.
The interest spread of 2.63% is where the actual business happens. Cost of borrowing: 7.07% (weighted average). Gross yield on assets: 9.70%. Net interest margin after expenses: 3.74%. It’s comfortable but not fat—because most of the margin disappears into provisions for NPAs, impairment charges, and employee costs. Infrastructure finance rewards scale and punishes defaults.
Solar Exposure25%₹21,984 Cr
State Utilities25%Govt. guaranteed
Cost of Funds7.07%Weighted avg
04 — Financials Overview
Q3 FY26: Numbers That Grew, But So Did the Questions
Result type: 9-Month Unaudited Results | Q3 FY26 EPS: ₹2.08 | 9M EPS (Average): ₹1.54 | Annualised EPS: ~₹6.15
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 2,130 | 1,698 | 2,057 | +25.4% | +3.5% |
| Operating Profit | 857 | 652 | 776 | +31.4% | +10.4% |
| OPM % | 40.2% | 38.4% | 37.7% | +180 bps | +250 bps |
| PAT | 585 | 425 | 549 | +37.6% | +6.6% |
| EPS (₹) | 2.08 | 1.58 | 1.95 | +31.6% | +6.7% |
The Math: Revenue up 25.4% YoY, operating profit up 31.4%, PAT up 37.6%. These are not typos. These are the kind of numbers that usually get analysts salivating. IREDA’s OPM expanded 180 bps YoY to 40.2%—not a typo either. The company’s operating leverage is kicking in hard. Impairment charges and tax rates are normalizing. Yet here we are, down 12.8% in three months. The disconnect between fundamentals and stock price is now a chasm.
05 — Valuation: The Leverage Discount
Is 17.1x P/E Fair When Your Debt-Equity Is 5.41x?
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