IREDA shares resume bull run after two days of losses; buy, sell or hold?

Shares of Indian Renewable Energy Development Agency (IREDA) resumed their bull run on Friday after two sessions of correction. IREDA stock gained 8.39% intraday to Rs 279 amid a correction in the broader market. In the last two sessions, the stock slipped 11.18% or Rs 32.4 on a closing basis on BSE. The multibagger stock hit a record high of Rs 310 on July 15, 2024. In the current session, the market cap of IREDA climbed to Rs 73,711 crore. IREDA shares saw the highest turnover of Rs 450.63 crore as 166.82 lakh shares changed hands on BSE today.

In terms of technicals, the relative strength index (RSI) of the stock stands at 63.6, signaling it's trading neither in the overbought nor in the oversold zone. IREDA shares are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day and 150 day moving averages.

The stock slipped to its lowest level of Rs 49.99 on November 29, 2023. The multibagger stock listed at a premium of 56.25% over the IPO issue price of Rs 32 in the same session.

IREDA stock listed at Rs 50 last year.

Here's a look at what analysts said on the outlook of IREDA stock after two days of correction.

Rajesh Palviya, Head Technical Research at Axis Securities said, "The counter has witnessed very strong momentum recently and moved up sharply from Rs 200 level to breach the Rs 300 zone. Some profit-taking is happening but the trend is still on the bullish side. One should deploy a trade around the Rs 250 range, keeping a stop loss placed at Rs 238. Until the stock holds this level, the trend may remain positive. Once it crosses Rs 265-270 levels, we can see a resumption of the rally and then possible upside targets will be Rs 310-320."

Ganesh Dongre, Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers said, "On the daily chart, the stock appears to be in the oversold zone. Other technical indicators, such as the Relative Strength Index (RSI), also suggest that the stock is near the oversold territory. The upcoming support level for this stock is anticipated to be around the 240-245 range. Should we observe further price reversal action, there could be an upward bounce in the stock in the upcoming weeks, potentially reaching the resistance level of Rs 290-300. Given this analysis, traders may consider buying this stock on dips, with a closing stop loss set at Rs 240, aiming for a target price of Rs 295."

Shiju Koothupalakkal, Technical Research Analyst, Prabhudas Lilladher said, "The stock has witnessed a decent rally since the last one month racing from Rs 175 level to hit the peak rate of Rs 310 level where it had resisted and with some profit booking has slipped down. The near-term support lies near Rs 248-250 zone from where we can expect a pullback to improve the bias once again and once a confirmation above Rs 280 zone is sustained, then we can anticipate for further rise to retest the previous peak zone of Rs 310 levels and further ahead. At the same time, a decisive breach below Rs 240 zone shall weaken the bias and thereafter, can expect for further slide."

In its recently announced earnings for the June 2024 quarter, profit after tax (PAT) climbed 30 per cent to Rs 384 crore in Q1 compared with Rs 295 crore in the corresponding quarter of last year.

IREDA’s revenue from operations climbed 32 per cent YoY to Rs 1,510 crore in the June 2024 quarter from Rs 1,143 crore in the corresponding quarter last year. IREDA said its outstanding loan book stood at Rs 63,207 crore in Q1 against Rs 47,207 crore in the year-ago quarter, up 34 per cent. 

Domestic borrowings stood at 84 per cent of total borrowings in Q1 against 75 per cent YoY. It raised a total Rs 5,373 crore for the quarter. 

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.