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Informist, Thursday, Jan. 9, 2025

 

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--IREDA Oct-Dec cost of borrowing 7.68% vs 7.80% in Jul-Sept 
--IREDA Oct-Dec NIM 3.33% vs 3.34% in Jul-Sept 
--IREDA: Capital adequacy ratio 19.63% as on Dec 31 vs 20.24% quarter ago 
--IREDA: Net NPA 1.50% as on Dec 31 vs 1.04% quarter ago, 1.52% year ago 
--IREDA: Gross NPA 2.68% as on Dec 31 vs 2.19% quarter ago, 2.90% year ago 
--IREDA Apr-Dec total income INR 48.40 bln vs INR 35.74 bln year ago 
--IREDA Apr-Dec net profit INR 11.97 bln vs INR 9.15 bln year ago 
--IREDA Oct-Dec total income INR 16.99 bln vs INR 12.53 bln year ago 
--IREDA Oct-Dec net profit INR 4.25 bln vs INR 3.36 bln year ago

 

By Priyasmita Dutta

 

NEW DELHI – A robust rise in the interest income of Indian Renewable Energy Development Agency Ltd. led the company to post a healthy profit of INR 4.25 billion for the December quarter, up 26.8% on year. The renewable sector financier's interest income during the quarter was INR 16.54 billion, up 37% on year. Sequentially, the company's profit rose 9.7%. 

 

In Jul-Sept as well, its net profit of INR 3.88 billion was primarily driven by interest income. The total revenue from operations during Oct-Dec was INR 16.99 billion, up 35.6% on year. 

 

While the interest income aided the company's top line, the equally higher interest expense ate into its profit pie. The interest outgo during Oct-Dec was INR 10.32 billion, up 36% on year. The financier's cost of borrowing during Oct-Dec was 7.68%, 14 basis points lower than the year-ago rate and 12 bps lower sequentially. Its net interest margin in the quarter ended December was 3.33%, higher than the 3.20% a year ago.

 

It is to be mentioned that at a time when multiple financial institutions are depending on borrowing from foreign markets to lower their cost of funds, IREDA managed to lower foreign borrowings while also bringing down its cost of funds. In its total borrowing portfolio of INR 159.78 billion in Apr-Dec, 15?me from foreign borrowings as against the 23% of last year's outstanding borrowings for the corresponding period. As on Dec. 31, of the total INR 85.69 billion external borrowing, INR 63.79 billion worth of foreign borrowings were hedged and INR 21.91 billion were unhedged. 

 

The healthy interest income during the quarter was on account of steady disbursements. The public sector company's loan disbursements were at INR 74.49 billion in Oct-Dec, up 25% on year. The company sanctioned loans worth INR 132.27 billion in the same period, up 45% on year. Shares of the company closed at INR 216 on the National Stock Exchange Thursday, 3.26% lower from the previous close. 

 

As of Dec. 31, the company's loan book was up 36.3% on year at INR 689.60 billion. For the first nine months of the year, IREDA's total income was INR 48.40 billion, up 35.4% on year and its net profit was INR 11.97 billion up 31% on year.

 

The capital adequacy ratio of the company in the end of the quarter under focus was 19.63%, as against 23.88% a year ago and 20.24% a quarter ago.   

 

The 27% on-year growth in net profit during the December quarter could have been better if the renewable sector financier had not increased provisioning against bad assets by 176% on year. In Oct-Dec, impairment on bad loans was INR 1.04 billion, as against INR 380 million in the corresponding period a year ago. This, however, helped the lender to improve its asset quality on an annualised basis. IREDA's gross non-performing asset ratio was 2.68%, better than 2.90% a year ago but worse than 2.19% a quarter ago. Net NPA, on the other hand, was 1.50% at the end of December, slightly better than 1.52% a year ago but worse than 1.04% a quarter ago. Its provision coverage ratio as of December end was 44.52%, as against 48.33% a year ago.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Deepshikha Bhardwaj

 

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