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IREDA Q3FY26 Results: Green Energy Giant Hits Record Profits—Time to Buy?

Lesson 188/323 | Study Time: 15 Min

Course: Quarterly Result Updates & Analysis

IREDA Q3FY26 Results: Green Energy Giant Hits Record Profits—Time to Buy?

As India’s premier pure-play green energy financier, IREDA (A Navratna CPSE) continues to be the backbone of the nation's 500 GW non-fossil fuel target. With over 38 years of experience and a strategic role in MoF and MNRE initiatives, IREDA is not just a lender but a key driver of the "Energy For Ever" mission.

Latest Results: A Deep Dive into Growth

IREDA has delivered a stellar performance for the quarter ended December 31, 2025, marked by massive growth in its loan book and profitability. Aum Growth which was 31% has softened a bit to 28%.

Section 1: Financial & Operational Performance (Q3FY26)

This table compares the current performance against the same period last year (YoY) and the immediate previous quarter (QoQ) to visualize growth trends.

Key Metric (₹ in Cr)	Q3 FY25-26	Q3 FY24-25	YoY Growth	Q2 FY25-26	QoQ Growth
Revenue from Operations	2,130	1,698	+25.4%	2,057	+3.5%
Operating Profit	857	652	+31.4%	776	+10.4%
Profit After Tax (PAT)	585	425	+37.6%	549	+6.5%
Earnings Per Share (EPS)	2.09	1.58	+32.2%	1.97	+6.1%
Outstanding Loan Book	87,975	68,960	+27.6%	84,477	+4.1%

Revenue growth is good at 26% while profits which were hammered to -36% in Q1fy26 improved in H1fy26 and even further in 9Mfy26 taking profit growth to 15%.

Section 2: Industry-Specific KPIs & Asset Quality

For an NBFC, growth is nothing without quality. IREDA shows a healthy trend in margins and a strategic reduction in bad loans. NPA was a worry during Q1, we saw improvements here.

Net Interest Margin (NIM): Annualized NIM improved to 3.74% compared to 3.33% in the previous year, showing better pricing power.
Asset Quality Recovery: Gross NPA reduced to 3.75% from 3.97% in the previous quarter. Net NPA also improved to 1.68% from 1.97%.
Provision Coverage Ratio (PCR): Substantially increased to 56.08% (from 44.52% YoY), strengthening the balance sheet against future risks.
Cost of Borrowings: Effectively reduced to 7.07% from 7.68% YoY, thanks to its 'AAA' domestic and 'BBB' international ratings.

Section 3: Valuation & Profitability Ratios

Using Step 4 (Valuation) of our Wealth-Building Strategy, let's look at the efficiency metrics as of Dec 31, 2025:

Ratio Type	Metric	Value
Profitability	Return on Net Worth (9M Annualized)	14.80% (Estimated)
Leverage	Debt Equity Ratio	5.41 (Improved from 5.89 YoY)
Solvency	CRAR (Capital Adequacy)	19.54%
Valuation	Current Market Price (CMP)	₹137
Valuation	Price to Book Value (P/B)	~2.8x (Based on Dec Net Worth)

Section 4: Future Growth

GIFT City Advantage: The new subsidiary at IFSC GIFT City is now registered, allowing IREDA to fund projects in foreign currency, significantly lowering hedging costs.
Solar & Beyond: While Solar remains 25% of the book, high-growth sectors like Green Hydrogen, Pumped Hydro, and EV Charging are the new focus areas.
Fundraising Power: IREDA successfully raised ₹2,006 Cr via QIP and JPY 26 Billion via ECB, ensuring ample liquidity for FY27.
We may see 26% sales growth and 25% Profits growth this year due to improved profit margins.

Conclusion

IREDA's Q3 results are "Excellent," matching its consistent MOU ratings. The double-digit growth in PAT and the shrinking NPA levels make it a top-tier contender for long-term wealth building. However, as investors, we must always enter at the right Fair Value.

Fairvalue:

https://docs.google.com/spreadsheets/d/e/2PACX-1vTvrWpZDG-6QTvvf-wtpIcZNcfmO3AGsrMWyWSwkPXmSeJhA2oJJ17Ra9gepD7CGljwOlTr7Wb1GqbB/pubhtml?gid=1027318948&single=true

Disclosure: SEBI Registration No: INA000020651 | Investment Advisor Name: PROFIT FINSTOCK PRIVATE LIMITED Investment in the securities market is subject to market risks. Read all the related documents carefully before investing.

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