If you are about to open a demat account, you should keep an eye on stocks that are moving a lot because they can offer you an opportunity to make money. In 2024, one such stock is IREDA or the Indian Renewable Energy Development Agency.
Between January 1, 2024, and October 14, 2024, IREDA’s share price increased by a whopping 111.7%, which means it has more than doubled. Compared to it, the benchmark, Nifty 50, yielded a return of 15.6% in the same time frame.
That said, IREDA’s share price has seen a much higher volatility than Nifty 50, which also makes it a risky stock for traders. Let us how its stock price has fared since January 1, 2024.
Ireda’s Share Price Performance Vs. Nifty 50 In 2024
Between January 1, 2024, and February 7, 2024, IREDA share price jumped by 90.2% compared to a mere 0.9% increase in Nifty 50. The fact that IREDA’s price almost doubled in just over a month when Nifty 50 did not post sizeable gains tells you that the volatility in this stock’s price does not have much to do with that in Nifty 50.
Then, between February 7, 2024, and March 20, 2024, IREDA’s stock fell by 36.8%, while Nifty 50 was down by 0.4%. In other words, IREDA lost more than a third of its value when Nifty 50 hardly moved.
Between March 20 and July 19 this year, IREDA’s stock soared by 116.3%, while Nifty 50 moved up by 12.3%. Again, IREDA moved up by close to ten times as much as Nifty 50 moved up in the duration.
Later on, between July 19 and October 14 this year, IREDA’s stock fell by 18.6%, while Nifty 50 moved up by 2.4%. Clearly, the ups and downs in IREDA are to a large extent disassociated with those of Nifty 50.
How Has Ireda’s Business Performed In 2024?
IREDA is the largest pure play green financing company in the country. It has close to four decades of experience in providing finance to projects in the renewable energy sector. As India is increasing its focus on green projects for its energy requirements, IREDA’s prospects look good.
The company’s bottom line grew at an appreciable rate this year. Based on the data available on its website, IREDA’s net profit grew by 30.2%, 33%, and 67.1%, respectively, on a year-on-year basis in the June 2024 quarter, March 2024 quarter, and December 2023 quarter.
This shows that the company’s net profit is growing consistently and that too at a high rate. Now, let us look at its asset quality. As of June 30, 2024, the company’s net non-performing assets ratio stood at 0.95%, which was much better than 1.61% on June 30, 2023.
IREDA has managed to improve its asset quality significantly in the last one year. In the banking and finance industry, a net NPA ratio of 1% is considered a benchmark. IREDA’s performance on this parameter is better than the benchmark.
There is not much in the performance of the company, which explains why its stock has been so volatile this year.
Conclusion
While IREDA’s share price has risen at a much faster rate than Nifty 50 in 2024 so far, it has also remained more volatile than the benchmark. Meanwhile, its business is growing at a high rate, as evident from its profit growth in the last three quarters.
Being the largest pure play green financing company has its advantages. As we see more renewable energy projects in India, IREDA’s business is expected to grow. That said, if you are about to open demat account, before investing in the stock, you should keep in mind that it can be much more volatile than the overall market. Hence, it can swing wildly in either direction.
