IREDA shares fall 8% in two days post Q4 – Brokerage target price hints at 45% upside

Indian Renewable Energy Development Agency Ltd (IREDA) shares have faced selling pressure following its fourth-quarter earnings release, yet domestic brokerage ICICI Direct sees a window of opportunity, pointing to a potential 45% upside from current levels.

The state-owned renewable energy financier saw its shares decline as much as 8% since the company announced its Q4FY26 results on Friday, May 29, post-market hours. On Tuesday, June 2, the counter extended its losses, slipping over 2.5% to touch a day's low of Rs 122.90 on the BSE. This follows a weak session on Monday when the stock settled 5.9% lower. At the last check on Tuesday, the stock was trading 1.70% lower at Rs 124.10 per share.

IREDA share price target

Despite this, ICICI Direct has retained its bullish stance on the PSU counter. The brokerage maintained its ‘Buy’ rating on the stock with a 12-month target price of Rs 180 per share, implying about 45% upside from current levels.

Why ICICI Direct says

"Q4FY26 reflected a more conservative provisioning approach, strengthening confidence on sustainability of portfolio quality despite near-term profitability pressure," ICICI Direct said.

The brokerage expects that management's disciplined underwriting and improving portfolio seasoning will keep future credit costs contained to 60-70 basis points over FY26-28E, aiding the core earnings trajectory.

ICICI Direct highlighted that the government's focus on scaling India's renewable energy capacity from roughly 275 GW currently to 500 GW by FY30 continues to provide a multi-year growth runway for IREDA.

Backed by diversification beyond solar and utilities into emerging tech like manufacturing, storage, and energy-transition infrastructure, the brokerage expects a healthy advance growth of 24-25% CAGR over the FY26-28E period.

“Additionally, strengthening capital base and access across domestic borrowings and ECBs enhance funding flexibility and support future growth while preserving long-term profitability profile,” the brokerage added.