IREDA shares down 28% in 2025. Can the stock rebound past Rs 185 or is it time to sell?

Economic Times

2 days ago

After a scorching rally that saw shares of Indian Renewable Energy Development Agency (IREDA) triple in less than a year, the state-run financier has lost nearly a third of its value in 2025, and over 40% from its peak. With the stock now trading below all key technical averages and investor confidence rattled by asset quality concerns, the question looms large: is this merely a pause before the next leg up, or has the market already priced in IREDA's green ambitions?
ADVERTISEMENT On the face of it, IREDA's operational momentum remains intact. In the June quarter, loan sanctions rose 29% year-on-year to Rs 11,740 crore, while disbursements climbed 31% to Rs 6,981 crore. The company's outstanding loan book expanded 27% to Rs 79,960 crore, bolstered by strong demand across renewables, energy efficiency, green hydrogen, and EV infrastructure.
But markets appear unconvinced. Shares are down 28% year-to-date, 5.9% in the past week alone, and 41.3% over the last 12 months. Since hitting an all-time high of Rs 283 in July 2024, the stock has corrected 43.6%, trading now at just 16.6% above its 52-week low of Rs 137 hit in March this year.
From a technical standpoint, the picture is decisively bearish. IREDA is trading below all eight of its key simple moving averages, from the 5-day to the 200-day, while its Relative Strength Index (RSI) at 38.6 and MACD at -2.5 both signal waning momentum.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, said, 'Since the last 4 months, the price has been trading sideways. During this period, the price tested its 200 DEMA twice but failed to sustain above the same.' He added that, 'the level of 185 on the upside is a strong resistance for the stock, while the level of 135 is likely to act as a strong support. Momentum [is] unlikely in the stock as long as the price trades within this range.'
ADVERTISEMENT According to Shah, 'currently the RSI has dropped [below] 40, indicating weakening momentum. MACD, on the other hand, is below the zero line which further reinforces the bearish trend in the stock.' He warned there are 'no signs of base formation or reversal pattern on the charts.'Ajit Mishra of Religare Broking echoed this sentiment, noting that the stock 'faces strong resistance around Rs 175–180' and warned that 'a breach below [the] Rs 140 support level could trigger a deeper correction.'
ADVERTISEMENT Shah sees a short-term breakout level at Rs 185 and said 'a strong close above Rs 185 can lead to price moving [to] Rs 210 level in the near term.'Whether the selloff reflects a deeper shift in investor sentiment or simply a bout of profit-taking remains contested.
ADVERTISEMENT Shah believes 'this is more of [a] technical correction than a longer-term breakdown,' noting that prices recently bounced near the 61.8% Fibonacci retracement level drawn from the low of Rs 50 (Nov 2023) to the high of Rs 310 (July 2024). However, he added that a fall below Rs 121—'a major swing low'—could invalidate this view and confirm a trend reversal.
Amit Trivedi, Technical Analyst at YES Securities, was more cautious. 'Unless a strong base or reversal structure emerges, this appears to be more than a technical correction. The breakdown seems to be broad-based and systemic, not just a short-term overreaction.'
ADVERTISEMENT Trivedi said that 'a close above Rs 175 with volumes could signal short-term strength,' but so far, 'no classical base formation is clearly visible.'
Kunal Kamble, Senior Technical Research Analyst at Bonanza also flagged caution and said, 'It is still too early to look for any base formation or reversal pattern at current levels.' He pegged Rs 190 as a strong resistance zone and advised that 'fresh long positions are not recommended' without confirmation of a reversal. 'The major support is placed near Rs 119,' Kamble said. 'Given the ongoing downtrend, it is advisable to avoid anticipating a reversal here.'IREDA's sharp decline has come despite continued business growth. Yet concerns over asset quality and rising costs have overshadowed its operational performance.Nitin Jain, Senior Research Analyst at Bonanza, pointed out that net profit for Q1FY26 dropped about 36% YoY to Rs 247 crore, "driven by a sharp rise in operating expenses (+60%) and a jump in NPAs (gross 4.13%, net 2.05%)—largely tied to exposure to the Gensol group.'While Jain sees long-term potential in IREDA's renewable energy portfolio and valuations that are 'reasonable to slightly cheap,' he noted that 'near-term earnings risk, asset quality concerns, and sentiment overhang… may keep the stock range-bound.'Jain also flagged 'NPA risk, operating leverage pressure, and dependence on refinancing' as key risks for the second half of FY25.While Rs 185 has emerged as the widely watched resistance level, analysts are also pointing to other crucial inflection points that could dictate IREDA's next move.Mandar Bhojane, Senior Equity Research Analyst at Choice Broking, noted that "currently, the stock is trading in a sideways trend. In the near term, a decisive close above Rs 170 could trigger fresh buying momentum, with upside targets of Rs 180 and Rs 190. On the downside, if the price breaks below Rs 153, it may lead to a correction toward Rs 140, which will act as a major medium-term support level and target in case of further weakness."Amit Trivedi of YES Securities also highlighted Rs 175 as an immediate hurdle, stressing the need for 'evidence of demand absorption' and 'a breakout above ₹175 on strong volumes' for any meaningful recovery to take shape.Kunal Kamble from Bonanza added that without confirmation of a reversal, 'any short-term rise should be viewed as a selling opportunity within the prevailing negative trend.'With multiple resistance levels clustered between Rs 170 and Rs 185, and volume indicators failing to confirm accumulation, analysts suggest investors may be better served waiting for a definitive breakout rather than positioning prematurely.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)