IREDA shares are down 26% from record high but analysts are bullish, here's why 

Shares of Indian Renewable Energy Development Agency Ltd (IREDA) have fallen 26% from their record high reached  in July this year. The stock touched an all-time high of Rs 310 on July 15, 2024 and a 52 week  low of Rs 49.99 on November 29, 2023. In the current session, the stock rose 2.07% to Rs 229.25 against the previous close of Rs 224.60. 

Market cap of the renewable energy stock rose to Rs 61,361 crore. IREDA shares saw a high turnover of Rs 356.68 crore in as 205.96 lakh shares changed hands on BSE. IREDA’s market cap rose to Rs 47,425 crore.

In terms of technicals, the relative strength index (RSI) of the stock stands at 45.7, signaling it's trading neither in the overbought nor in the oversold zone.

Pravesh Gour, Senior Technical Analyst at Swastika Investmart said, "IREDA has formed a bullish engulfing candle on the daily time frame near its important support zone at the 100 SMA, along with a positive divergence in the RSI. This setup indicates a possible pullback, with Rs 240 being the first hurdle. Above that, a rally could stretch toward the Rs 265 level. On the downside, the Rs 203-200 range will act as an important demand zone."

Gaurav Bissa, VP, InCred Equities said, "Ireda had a very strong run this year on back of strong volumes. Hhowever, it has now corrected over 26 percent from top in the recent times. The price is trading below its 89dema for the first time along with a wedge breakdown. It is also trading in formation of lower high and lower low, which is a characteristic of a downtrend. However, the fall has been seen in absence of major volumes suggesting a close above Rs 235 levels can result in resumption of upside towards life high levels."

Ameya Ranadive CMT CFTe, Sr Technical Analyst, StoxBox said, "Indian Renewable Energy Development Agency (IREDA) is currently trading at Rs 229, down 27% from its all-time highs following a sharp rally that began in December 2023. Despite recent market pressures, the stock has managed to hold minor support in the ?215-225 range over the past week, though some fluctuations were observed.

Technical indicators suggest that a potential recovery may be on the horizon. The Relative Strength Index (RSI) has rebounded from oversold conditions, rising to 49 in the last three days, indicating improving momentum. A breakout above the Rs 240 level, with sustained volume, could trigger fresh buying interest, especially given the supply pressure currently seen at these levels.

Traders may consider entering long positions once the stock breaks and sustains above the downward sloping channel at Rs 230. A stop loss below the 100-day EMA, near Rs 200, is recommended to manage risk. If the breakout occurs, mid-term targets of Rs 265 to Rs 280 can be expected. However, if IREDA fails to hold the Rs 200 level, this bullish outlook would be invalidated, signaling potential further downside."

Jigar S Patel, manager technical analysis at Anand Rathi said, "Since reaching its peak of Rs 310 on 15 July 2024, IREDA has experienced a sharp correction of nearly 100 points, resulting in a 26% decline in its stock price. At the current stage, the price action has stabilized near the previous breakout zone, suggesting a potential support level as seen in the chart. From a technical perspective, the daily Relative Strength Index (RSI) has formed a sharp, V-shaped recovery around the 33 level, indicating a possible reversal in momentum and a favourable entry point. Given these factors, we recommend a long position within the price range of 218-223, targeting an upside of 250. A stop-loss should be placed near Rs 205, based on a daily closing price, to manage risk effectively."

AR Ramachandran, Independent SEBI Research Analyst said, "IREDA stock price is  bullish on the Daily charts with strong support at Rs 206.  A daily close above the resistance of Rs 229 could lead to a target of Rs 259 in the near term."

Shares of IREDA made their market debut at a premium of 56.25% to the issue price at Rs 50 on November 29 on BSE and NSE. The price band of IREDA's IPO was Rs 30-32 apiece with a lot size of 460 shares. The IPO was open for bidding from November 21 to November 23.

IREDA is a Mini Ratna (Category - I) government enterprise. It is administratively controlled by the Ministry of New and Renewable Energy (MNRE). IREDA has been actively promoting, developing, and extending financial assistance for new and renewable energy projects, as well as energy efficiency and conservation projects for over 36 years.