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IREDA Q4FY25 performance

ICICIdirect Research 17 Apr 2025 DISCLAIMER

IREDA reported strong performance in Q4FY25, wherein AUM growth continued at robust pace of 28% YoY to ₹76,282 crore, led by 20% YoY growth in disbursement. All the segment including Solar, Ethanol and exposure to State Utilities have witnessed growth, except wind power which remained slower.

Operational performance remained robust (NII grew 57.3% YoY) driven by strong growth in AUM (28% YoY) and ~85 bps YoY increase in margins (calculated) at 4.5%. Steady opex along with huge NII growth has led to 55.2% YoY growth in PPoP at ₹ 759 crore.

Gross NPA improved by ~23 bps QoQ to 2.45%, though, credit cost remained higher at ₹129 crore in Q4FY25 (~70 bps of advances). Despite elevated provision, earnings growth remained robust at 48.7% YoY to ₹ 502 crore, on the back of continued strong growth in AUM. Clarity on exposure to one stressed account is awaited, though higher provision in last 2 quarters seems to factor in anticipated slippages.

Long term structural growth story remains intact (28-30% CAGR growth anticipated in AUM) amid government’s focus on renewable sector and foray in retail segment. Operational matrix to remain largely steady with RoA at 1.9-2% ahead. Thus, we remain positive on the growth prospects which would aid valuation ahead.

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