Tuesday’s early morning trading session saw a significant selling of Indian Renewable Energy Development Agency (IREDA) Limited shares. Following the domestic brokerage Philip Capital’s prediction of a significant decline and its “sell” rating of IREDA shares, the PSU stock was subject to selling pressure. The NSE opened the IREDA share price today with a downside gap at ₹288.70 apiece, and shortly after the Opening Bell, the share price reached an intraday low of ₹273.15. IREDA shares, on the other hand, saw value buying at the lower end and recovered some of the ground that it had lost during the early morning trading session.
Experts in the stock market believe that the local brokerage Philip Capital’s “sell” recommendation is the reason for the current decline in the price of IREDA shares. They added that the brokerage had kept the PSU stock at a “sell” rating, indicating that they expected IREDA shares to drop precipitously. IREDA has produced solid Q1FY25 earnings, they insisted, and the stock has increased steadily over the previous four sessions. Therefore, some profit-booking in PSU shares was anticipated. They added that even though the brokerage had previously marked the stock as “sell,” the price of IREDA shares surged.
Prospects for the price of IREDA shares
Avinash Gorakshkar, Head of Research at Profitmart Securities, commented on the reason(s) behind the immediate decline in the price of IREDA shares in the morning deals: “The state-owned stock is experiencing a correction in its share price due to the’sell’ tag applied by domestic brokerage Philip Capital, which indicates a significant possibility of downside.” Profit-booking has been activated in IREDA shares as a result of the stock’s continued climb.”
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Even with a “sell” rating, IREDA shares have demonstrated profit potential. Investors should take heart from the fact that the stock has returned over 60% to its owners in just one month. If you are thinking about buying IREDA shares, this profit potential should give you hope.
The impressive Q1 results 2024 from IREDA, which exceeded market expectations, ought to give investors hope. This confidence is further supported by the company’s strong balance sheet and the anticipated advantages of the PLI Scheme in the upcoming Budget 2024.
Target price for IREDA shares
Sumeet Bagadia, Executive Director at Choice Broking, discussed the outlook for IREDA shares in the following way: “The IREDA share price has managed to sustain above its current support at ₹270, despite selling in the early morning.” It is recommended that IREDA shareholders retain the scrip with a strict stop loss at ₹270 in order to achieve the short-term goals of ₹300 and ₹330.
Regarding the recommendation to the new investors, Bagadia suggested bottom fishing for short- to medium-term targets of ₹300, ₹330, and ₹350, with a rigorous stop loss around ₹270.
IREDA News
The domestic brokerage firm Phillip Capital raised its target price for IREDA shares from ₹110 to ₹130 and maintained its’sell’ rating in its report on the share price outlook for IREDA, which was issued on July 14, 2024. The brokerage business observed that passive flows, as opposed to fundamental causes, are the main drivers of the recent stock surge and that the best value has already been realized.
The domestic brokerage firm welcomed IREDA’s continuous expansion and projected robust loan growth for FY24–26 at a CAGR of 25% as a result of the nation’s growing need for renewable energy. They do not, however, anticipate earnings growth keeping up with the expansion in loans because of pressure on margins.
(Disclaimer: The opinions expressed here are not affiliated with Businessuncover; rather, they represent the opinions of certain analysts or broking firms. Before making any financial decisions, we suggest investors to consult with qualified specialists.)
