IREDA share price dips 5% as Philip Capital slaps ’sell’ tag. Opportunity for bottom fishing?

Stock market today: Shares of Indian Renewable Energy Development Agency (IREDA) Limited witnessed strong selling in the early morning session on Tuesday. The PSU stock came under selling pressure after the domestic brokerage Philip Capital predicted heavy correction and gave a 'sell' tag to IREDA shares. IREDA share price today opened with a downside gap at ₹288.70 apiece on the NSE and touched an intraday low of ₹273.15 per share within a few minutes of the Opening Bell. However, IREDA shares witnessed value buying at the lower level and pared some of its lost ground in the early morning session.

According to stock market experts, weakness in IREDA share price today can be attributed to the 'sell' tag given by the domestic brokerage Philip Capital. They said the brokerage had maintained its 'sell' tag on the PSU stock, predicting a deep downside in IREDA shares. However, they maintained that IREDA has delivered strong Q1FY25 results, and the stock has continuously risen for the last four sessions. So, some profit-booking was expected in the PSU stock. They also said that IREDA share price skyrocketed despite the brokerage giving the stock a 'sell' tag earlier.

IREDA share price outlook

On immediate reason(s) that has pulled down IREDA share price in the morning deals, Avinash Gorakshkar, Head of Research at Profitmart Securities, said, "IREDA share price is correcting as the domestic brokerage Philip Capital has slapped 'sell' tag to the state-owned stock predicting strong downside possibility. As the stock has continuously risen, profit-booking has triggered in IREDA shares."

Despite the 'sell' tag, IREDA shares have shown profit potential. The stock has delivered around 60 percent return to its shareholders in just one month, a promising sign for investors. This profit potential should instil optimism in those considering IREDA shares.

IREDA's strong Q1 results 2024, which have beaten market estimates, should instill confidence in investors. The company's sound balance sheet and the expected benefits from the PLI Scheme in the upcoming Budget 2024 further reinforce this confidence.

IREDA share price target

Speaking on the outlook of IREDA shares, Sumeet Bagadia, Executive Director at Choice Broking, said, “Despite selling in the early morning, the IREDA share price has managed to sustain above its current support at ₹270. IREDA shareholders are advised to hold the scrip with a strict stop loss at ₹270 for the near-term targets of ₹300 and ₹330.”

On the suggestion to the fresh investors, Bagadia advised bottom fishing with a strict stop loss at ₹270 for short to medium-term targets of ₹300, ₹330 and ₹350.

IREDA news

In its report on IREDA share price outlook (published on 14th July 2024), the domestic brokerage firm Phillip Capital maintained its 'sell' rating on IREDA shares, raising the target price from ₹110 to ₹130. The brokerage firm noted that the recent stock rally is primarily driven by passive flows rather than fundamental factors and has already captured the best value.

The domestic brokerage firm acknowledged IREDA's continued growth, expecting strong loan growth at a CAGR of 25 percent over FY24-26 due to the country's rising demand for renewable energy. However, due to pressure on margins, they do not anticipate earnings growth keeping pace with loan growth.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.