IREDA Q1 Results: Net profit falls 35%, asset quality sees sharp deterioration

State-run Indian Renewable Energy Development Agency Ltd. (IREDA) reported June quarter results after market hours on Thursday, July 10, which have resulted in a sharp deterioration in asset quality on a sequential basis.During the June quarter, IREDA’s gross NPA worsened to 4.13% from 2.45% in the March quarter, while net NPA deterioration to 2.05% from 1.35% in March.
IREDA’s asset quality was meant a key monitorable as it was in focus due to its exposure to Gensol Engineering, which has now fighting insolvency proceedings.
IREDA has an exposure of ₹470 crore to Gensol Engineering, including a term loan worth ₹254.9 crore, and additional working capital facilities worth ₹215.7 crore. The National Company Law Tribunal (NCLT) has approved IREDA’s insolvency petition against Gensol.Net profit for the quarter declined by 35.7% to ₹247 crore, compared to ₹384 crore that it had reported during the same quarter last year.

Revenue growth for the quarter stood at 28.9% to ₹1,947 crore from ₹1,510 crore last year.Earlier this month, the company had already disclosed its business momentum update for the quarter gone by.

The amount of loans sanctioned by IREDA during the June quarter increased by 28.5% on a year-on-year basis to ₹11,740 crore.

Disbursement of loans stood at ₹6,981 crore between April-June, implying a growth of 31.1% from the same quarter last year.

IREDA’s loan book is now close to ₹80,000 crore, growing by 26.5% during the June quarter, in comparison to the year-ago period figure of ₹63,207 crore.

Shares of IREDA had ended 2.4% higher on Thursday ahead of the results announcement at ₹169.88. The stock is down over 40% from its all-time high of ₹310.