Indian Renewable Energy Development Agency: FY26 Results — The Largest Green Lender Bumps Into Loan Stress

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NSE:IREDA on TradingView

1. At a Glance

IREDA closed FY26 with net profit of ₹1,873 crore against ₹1,699 crore in FY25—a 10% lift on the headline. Revenue jumped 23% to ₹8,309 crore. Loan book expanded to ₹76,281 crore as of March 2026 (₹64,564 crore in H1FY25). The market prices the stock at ₹120, yielding a P/E of 18.0x against a peer median of 17.75x.

But here’s the sting: net NPA crept back to 1.68% in Q4 (from 1.35% in Q3). Gross NPA sat at 3.75%, up from the 2.36% comfort zone of FY25’s full year. The interest coverage ratio is anaemic at 1.48x. And the balance sheet is muscular on debt—₹77,846 crore of borrowing against ₹10,972 crore of net worth, a debt-to-equity of 5.65x.

IREDA owns the renewable finance niche: ₹33,795 crore market cap, 75% sovereign-owned, a Navaratna institution steering GoI’s green energy money. But the loan book’s cost is rising.

2. Introduction

IREDA—Indian Renewable Energy Development Agency—is a fully Government of India enterprise under the Ministry of New and Renewable Energy. Notified as a public financial institution and registered as a non-deposit-taking NBFC with the RBI, it plays the role of plumber for India’s green energy dreams, channeling finance from project conception through post-commissioning across solar, wind, hydro, ethanol, biomass, and state utility lending.

The company went public in November 2023, raising ₹2,150 crore (₹1,290 crore fresh, ₹860 crore OFS). It then raised ₹2,005 crore in Q1FY26 via QIP. In February 2026, the board approved a further QIP of up to ₹2,994 crore, still pending. The company is ICRA AAA-rated on its long-term borrowings—a sovereign fortress.

But fortress walls need maintenance. FY26 saw management reshuffles: Tusar Kant Parida joined as ED (Finance & Accounts) in March 2026. Jagdeep Singh took over as Chief Risk Officer on January 1, 2026. Three senior exits also happened. These moves suggest neither panic nor stasis—recalibration.

3. Business Model: WTF Do They Even Do?

IREDA is the nation’s largest pure-play green financing NBFC. It lends to renewable energy projects across the entire value chain: conceptualization, construction, commissioning, equipment manufacturing, transmission, and state utility refinancing.

Revenue mix is heavily skewed toward interest income (97% in FY24). The lending yield on loan assets stood at 9.97% in FY24, up from 9.68% in FY23. But cost of funds rose to 7.1% by 9MFY26 (from 7.2% in FY25). The squeeze is visible: net interest margin compressed to 2.85% in FY24 from 2.82% in FY23—not dramatic, but directional.

Portfolio by segment (H1FY25 disbursements): Solar & Thermal (26%), Wind (16%), State Utility loans (21%), Hydro (11%), Manufacturing (6%), Ethanol (7%), Others (13%). Geographically: Andhra Pradesh (15%), Rajasthan (14%), Karnataka (13%), Tamil Nadu (9%), Gujarat (8%), Telangana (8%), Maharashtra (7%), rest dispersed.

The model is wholesale lending to large-ticket projects—no retail, no consumer deposits. Top 20 borrowers accounted for 260% of net worth as of March 2024 (up from 315% in March 2023). Concentration risk is baked in. When one large borrower sneezes, the portfolio catches cold.

4. Financials Overview

Figures are consolidated, in ₹ crore.

*EBITDA calculated as: PBT (₹2,337) + Depreciation (₹44) – Other Income (₹28) = ₹2,351 crore.

Quarterly Progression (Standalone):

Revenue grew in three of the four quarters: Q1 (₹1,904cr), Q2 (₹1,947cr, down to 16% profit variance), Q3 (₹2,057cr), Q4 (₹2,175cr, +14% QoQ). Net profit volatility spiked in Q2—₹247 crore, a 1.80% QoQ decline—owing to a jump in expense provisions (₹427 crore vs. ₹12 crore in Q1).

The story: top line grows at a steady clip. Profitability lurches because loan loss provisions are lumpy. Financing margins (shown in the quarterly detail) dipped to 16% in Q2FY26 but recovered to 29–34% thereafter. The company is managing spreads but not smoothly.

5. Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

The market currently pays 18.0x earnings here, a discount to its own five-year median of 27.2x. Versus peers (Power Finance Corporation, REC, IRFC, HUDCO), IREDA sits at the median P/E of 17.75x—neither a premium nor a discount.

Return on equity of 15.6% sits