Indian Renewable Energy Development Agency (IREDA) reported a mixed performance for the June quarter (Q1 FY27), with profitability declining sequentially due to higher finance costs and increased provisions, although earnings remained higher than a year ago.
The state-owned renewable energy financier reported a net profit of ₹339 crore for the quarter ended June 2026, registering a 37.1% year-on-year (YoY) increase from ₹247 crore in the corresponding quarter last year.
However, on a sequential basis, net profit declined 31.3% from ₹493 crore reported in the March quarter (Q4 FY26).
On the top line, revenue from operations rose to ₹2,249 crore, up 15.5% YoY from ₹1,948 crore in the year-ago period.
Compared with the March quarter, revenue also inched marginally by 0.7% from ₹2,173 crore, supported by continued growth in interest income, which increased to ₹2,198 crore from ₹1,909 crore a year ago and ₹2,138 crore in the previous quarter, reflecting sustained expansion in the company’s loan book.
However, the improvement in income was offset by a sharp rise in funding costs and provisions. Total expenses increased to ₹1,837 crore, compared with ₹1,655 crore in the year-ago quarter and ₹1,562 crore in Q4 FY26.
The increase was largely driven by finance costs, which climbed to ₹1,341 crore, up from ₹1,218 crore a year earlier and ₹1,241 crore in the preceding quarter, indicating a higher cost of borrowings as the company’s lending operations expanded.
The quarter also saw a rise in impairment on financial instruments, which increased to ₹418 crore from ₹363 crore in the corresponding quarter last year and ₹215 crore in the March quarter. The higher provisioning weighed on profitability despite healthy growth in operating income.
Asset quality remains stable; loan book grows 19% YoY
On the asset quality front, IREDA’s performance remained stable during the quarter. Gross NPAs stood at 3.76% as of June 30, 2026, compared with 4.13% a year earlier, although they edged up from 3.49% at the end of March 2026.
Net NPA improved to 1.23% from 2.06% in the year-ago period and also declined marginally from 1.29% in the previous quarter, reflecting healthy recoveries and a stable credit profile. In absolute terms, gross NPAs stood at ₹3,568 crore, while net NPAs declined to ₹1,134 crore from ₹1,615 crore a year ago.
Meanwhile, the company’s outstanding loan book continued to expand, rising 19% year-on-year to ₹94,936 crore as of June 30, 2026, compared with ₹79,941 crore a year earlier.
On a sequential basis, the loan book grew 2% from ₹93,069 crore at the end of March 2026, reflecting sustained growth in renewable energy financing.
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