IREDA Q1 Results: Asset quality due to Gensol Engineering exposure, growth outlook in focus

Shares of state-run Indian Renewable Energy Development Agency Ltd. (IREDA) are trading with gains on Thursday, July 10, ahead of its June quarter results, which will be reported later in the day.

Earlier this month, the company had already disclosed its business momentum update for the quarter gone by.

The amount of loans sanctioned by IREDA during the June quarter increased by 28.5% on a year-on-year basis to ₹11,740 crore.

Disbursement of loans stood at ₹6,981 crore between April-June, implying a growth of 31.1% from the same quarter last year.

IREDA's loan book is now close to ₹80,000 crore, growing by 26.5% during the June quarter, in comparison to the year-ago period figure of ₹63,207 crore.

What will be in focus during the quarterly report is the company's growth in the Assets Under Management, loan mix, and more particularly, the asset quality.

IREDA's asset quality will be a key monitorable as it was in focus due to its exposure to Gensol Engineering, which has now fighting insolvency proceedings.

IREDA has an exposure of ₹470 crore to Gensol Engineering, including a term loan worth ₹254.9 crore, and additional working capital facilities worth ₹215.7 crore. The Company Law Tribunal (NCLT) has approved IREDA's insolvency petition against Gensol.

During the March quarter, IREDA's gross NPA improved to 2.45% from 2.68% in the December quarter, while net NPA improved to 1.35% from 1.5% in December.

Shares of IREDA are trading 1.7% higher ahead of the earnings announcement at ₹168.7. The stock is down 45% from its all-time high of ₹310.