Shares of Indian Renewable Energy Development Agency gained nearly 4 percent in intraday trade after the company reported a strong set of numbers for the third quarter of FY26. The sharp rise in profit and steady expansion in the loan book have once again put this renewable energy PSU in the spotlight. For investors tracking PSU stocks and green energy financing plays, the key question now is whether the rally has further legs or if the positives are already priced in.
Q3 FY26 Results at a Glance
IREDA delivered robust year-on-year growth in the December 2025 quarter, reflecting sustained demand for renewable energy financing across India.
The company reported a 38 percent rise in profit after tax, with PAT increasing to approximately ₹585 crore, compared to around ₹425 crore in the same quarter last year. This strong profit growth was supported by healthy expansion in revenue and higher loan disbursements.
Revenue from operations grew by about 25 to 26 percent year on year, driven by a rising interest income base and continued growth in sanctioned and disbursed loans. The results underline IREDA’s ability to scale its business while maintaining profitability despite a challenging interest rate environment.
Another key highlight was the loan book growth of nearly 28 percent YoY, which reflects strong execution and demand from renewable energy developers across solar, wind, hydro, bioenergy, and emerging green technologies.
Disbursements and Business Momentum
During the quarter, loan disbursements rose by over 30 percent, indicating faster project execution and improved financing activity. This is important because higher disbursements directly translate into future interest income and earnings visibility.
The company’s growing presence in newer segments such as green hydrogen, electric mobility, energy storage, and ethanol projects is also gradually expanding its addressable market. These segments are aligned with India’s long term clean energy and decarbonisation goals, providing structural growth visibility beyond near term earnings.
Asset Quality and Balance Sheet View
From a risk perspective, asset quality remains a key area to monitor. Gross and net NPAs showed mixed movement, with some improvement on a sequential basis but still requiring close tracking as the loan book expands.
That said, the company continues to benefit from sovereign backing and a strong capital position, which provides stability during periods of economic or sector-specific stress. Cost of funds remained relatively stable, helping protect margins despite fluctuations in interest rates.
Why the Market Reacted Positively
The nearly 4 percent jump in IREDA shares post results reflects three major factors.
First, the profit growth exceeded market expectations, reinforcing confidence in the company’s earnings trajectory. Second, the sustained loan book and disbursement growth confirmed that renewable energy financing demand remains strong despite broader market volatility. Third, PSU stocks linked to infrastructure and energy continue to attract investor interest due to policy support and long-term visibility.
Valuation and Stock Performance Context
While the Q3 numbers were strong, investors should also consider the stock’s recent price behaviour. IREDA has seen sharp rallies in the past year, followed by phases of consolidation and volatility. After a period of correction and sideways movement, the latest results have provided fresh momentum.
From a valuation standpoint, the stock trades at a premium to traditional PSU lenders but is often compared with niche NBFCs due to its specialised focus on renewable energy. The premium reflects growth expectations, policy tailwinds, and sector leadership, but it also means that earnings delivery needs to remain consistent.
Growth Drivers Going Forward
Several factors continue to support IREDA’s medium to long term outlook.
India’s aggressive renewable energy targets, including capacity expansion and energy transition initiatives, create a sustained pipeline of financing opportunities. Increased government focus on green hydrogen, battery storage, and grid-scale renewable integration further broadens the company’s growth runway.
Additionally, the company’s ability to raise funds at competitive rates due to its PSU status supports margin stability. As project execution improves and private sector participation increases, demand for structured green financing is likely to remain strong.
Key Risks to Watch
Despite the positives, investors should be mindful of potential risks.
Rising interest rates or tighter liquidity conditions could impact borrowing costs and margins. Delays in project execution or stress among renewable developers may affect asset quality. Regulatory changes and policy shifts, while currently supportive, can also influence sector dynamics over the long term.
For short term traders, technical levels and broader market sentiment will play a significant role in near term price movement.
Is IREDA a Good Buy After Q3 Results?
IREDA’s Q3 FY26 performance reinforces its position as a key beneficiary of India’s renewable energy transition. Strong profit growth, expanding disbursements, and a rising loan book provide solid fundamental support.
For long term investors, the stock remains a proxy for India’s clean energy financing story, provided one is comfortable with valuation premiums and sector-specific risks. For short to medium term investors, entry levels and market momentum should be carefully evaluated, as PSU stocks can be volatile around broader market trends.
Conclusion
The 38 percent year-on-year jump in Q3 PAT and the subsequent 4 percent rise in share price highlight renewed confidence in IREDA’s business model. While near term price movement may remain volatile, the company’s strategic role in renewable energy financing, backed by strong earnings momentum, makes it a PSU stock worth tracking closely after the latest results.
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Jaspreet Singh Arora is the Chief Investment Officer at Equentis, where he heads a seasoned team of equity analysts and turns two decades of market experience into portfolios that consistently beat the benchmark. A go-to voice on cement, building-materials, real-estate, and construction stocks, Jaspreet previously ran research desks at leading brokerages, honing an eye for the metrics that truly move share prices. His plain-spoken analysis helps investors cut through noise and act with conviction. When he’s not deep-diving into earnings calls, you’ll find him unwinding over sports, weekend cricket or a good history podcast.
