Indian Renewable Energy Development Agency Ltd.
ISIN: INE202E01016 • Market Cap: ₹32,011 Cr
The 5-Pillar Quality Audit for Indian Renewable Energy Development Agency Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (86.8%), Return on Capital Employed (9.5%), and equity compounding (16.5%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 6.31 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (48.8%) and 3Y PAT CAGR (78.6%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 16.29 vs PEG of 0.96 and Dividend Yield of 1.2%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 71.8%, backed by 4.9% institutional ownership.
Key Fundamental Strengths
Strong Topline Expansion (3Y Sales CAGR: 48.8%)
Revenue has expanded at 48.8% CAGR over 3 years, signaling industry market-share gains.
High-Velocity Profit Compounding (3Y PAT CAGR: 78.6%)
Net earnings have compounded at 78.6% annualized, demonstrating operating leverage.
Attractive Valuation Margin (P/E: 16.29)
Trading at a P/E multiple of 16.29, the stock offers a favourable risk-reward entry for quality compounding.
Areas to Watch & Potential Risks
Subdued Capital Efficiency (ROCE: 9.5%)
A sub-12% ROCE suggests return on capital barely exceeds the company's weighted average cost of capital (WACC).
Elevated Financial Gearing (D/E: 6.31)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Quantitative Strategy Eligibility
Checking IREDA against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 72/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Provides balanced valuation margin with strong profitability scores.
Financial Services Sector Peer Comparison
Compare IREDA directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Indian Renewable Energy Development Agency Ltd. (IREDA)Current | 72/100 | ₹32,011 Cr | 16.29 | 9.5% | 6.31 | — |
| HDFC Bank Ltd. (HDFCBANK) | 74/100 | ₹11.10 Lakh Cr | 14.05 | 12.8% | 1.01 | View |
| ICICI Bank Ltd. (ICICIBANK) | 76/100 | ₹10.06 Lakh Cr | 17.94 | 16.5% | 0.62 | View |
| State Bank of India (SBIN) | 71/100 | ₹9.66 Lakh Cr | 11.20 | 12.2% | 1.38 | View |
| Bajaj Finance Ltd. (BAJFINANCE) | 68/100 | ₹6.72 Lakh Cr | 33.07 | 13.9% | 3.86 | View |
| Life Insurance Corporation of India (LICI) | 87/100 | ₹5.22 Lakh Cr | 8.70 | 37.8% | 0.00 | View |
Frequently Asked Questions: Indian Renewable Energy Development Agency Ltd.
Q:What is the 5-Pillar Fundamental Score for Indian Renewable Energy Development Agency Ltd. (IREDA)?
Indian Renewable Energy Development Agency Ltd. has a RupeeTools Fundamental Score of 72/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (74/100), Financial Health (46/100), Growth (99/100), Valuation (82/100), and Ownership Quality (65/100).
Q:Is IREDA fundamentally strong for long-term investment?
Yes, IREDA exhibits solid fundamental strength with a 72/100 score, driven by a return on equity of 16.5% and a debt-to-equity ratio of 6.31.
Q:Does IREDA pass the Coffee Can Investing filter?
No. IREDA does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does IREDA compare against other Financial Services peers?
Within India's Financial Services sector, IREDA trades at a P/E of 16.29 and generates an ROCE of 9.5%. Compare its 5-Pillar score of 72/100 against top sector peers like HDFC Bank Ltd. (74/100), ICICI Bank Ltd. (76/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.