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Informist, Tuesday, Apr. 15, 2025

By Priyasmita Dutta

NEW DELHI – Robust rise in the interest income of Indian Renewable Energy Development Agency Ltd. pushed its net profit for the March quarter 49% higher on year to INR 5.02 billion. The financier's interest income for the quarter was INR 18.61 billion, up over 40% on year. Sequentially, the company's profit rose 18%. In Oct-Dec as well, its net profit of INR 4.25 billion was primarily driven by interest income. The company's total income for Jan-Mar period was INR 19.15 billion, up almost 38% on year.

While interest income aided the company's bottom line, high interest expense ate into its profit pie. The interest outgo for Jan-Mar was INR 11.04 billion, up over 30% on year. Shares of the company closed at INR 166.98 on the National Stock Exchange, up 8.3% from the previous close.

For 2024-25 (Apr-Mar), IREDA's net profit was INR 16.99 billion, up 36% from the previous year. Total income for the year was INR 67.55 billion, up 36% from the previous year. The renewable sector financier's interest expense for the year was INR 41.41 billion, nearly 31% higher on year. The cost of borrowing during FY25 was 7.61%, 20 basis points lower than the year-ago rate. Its net interest margin in FY25 was 3.27%, higher than 2.85% a year ago.

IREDA's total borrowing in FY25 was INR 252 billion, the company said in its investor presentation. IREDA is one of the few financial institutions that has been able to check its cost of borrowing from shooting up, without having to heavily depend on foreign markets like many of its peers. In its total outstanding borrowing profile of INR 647.40 billion, 87% was raised from the domestic market and remaining from foreign markets.

Commenting on the company's results, Chairman and Managing Director Pradip Kumar Das said IREDA's growth in profitability, and loan book underscores the "strategic focus" towards financing India's renewable energy plans. "We remain committed to being the enabler of India's green energy transition through innovative financial solutions and strategic partnerships," he said.

The company's healthy operations are also due to steady disbursements. The public sector company's loan disbursements as of Mar. 31 were at INR 301.68 billion, up 20% on year. The company sanctioned loans worth INR 474.53 billion, up 27% on year. With a net worth of INR 102.66 billion as of Mar. 31, the company's loan book was up 28% on year at INR 762.81 billion.

The 49% on-year growth in net profit for the March quarter could have been better if the financier had not increased provisioning against bad assets by 13 times on year. In Jan-Mar, impairment on bad loans was INR 1.29 billion, as against INR 94.5 million in the corresponding period a year ago. This, however, helped the lender to protect its asset quality from deteriorating compared to last year.

IREDA's gross non-performing asset ratio was 2.45% at the end of March, better than 2.68% a quarter ago but worse than 2.36% a quarter ago. Net NPA, on the other hand, was 1.35% at the end of March, better than 1.50% a quarter ago but worse than 0.99% a year ago. End

Edited by Ashish Shirke

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