IREDA Q2 profit stayed flat at Rs 554 crore as provisions absorbed loan growth
On 19 October 2026, Indian Renewable Energy Development Agency released its investor presentation for the quarter and half year ended 30 September 2026 . IREDA is India's largest pure-play green financing NBFC, which works like a lender that only funds clean-energy projects such as solar and wind plants . Revenue and operating profit grew on a larger loan book, but net profit was almost flat from a year ago because the impairment charge on financial instruments was much higher .
Net profit stayed flat while operating profit grew
Source: .
| Standalone, Rs crore | Q2 FY27 | Q1 FY27 | Q2 FY26 |
|---|---|---|---|
| Revenue from operations | 2,344 | 2,248 | 2,057 |
| Operating profit before depreciation and impairment | 904 | 841 | 776 |
| Impairment on financial instruments | 187 | 419 | 70 |
| Profit before tax | 707 | 413 | 696 |
| Profit after tax | 554 | 338 | 549 |
Source: .
| Ratio | As on 30.09.2026 | As on 30.09.25 | As on 31.03.26 |
|---|---|---|---|
| Yield on loan assets, gross | 9.41% | 9.87% | 9.54% |
| Cost of borrowings | 7.20% | 7.24% | 7.05% |
| Interest spread | 2.21% | 2.63% | 2.49% |
| Net interest margin, annualised | 3.83% | 3.72% | 3.65% |
Bigger loan book lifted income
Yield is the average interest earned on loans and cost of borrowings is the average interest paid on own debt. Spread is yield minus cost. Net interest margin measures net interest against earning assets on an annualised basis .
Total income moved with revenue because other income was only Rs 1 crore in each of the three quarters . For the half year ended 30 September 2026, revenue was Rs 4,592 crore against Rs 4,004 crore a year ago and operating profit was Rs 1,745 crore against Rs 1,454 crore .
Credit cost absorbed the operating gain
Impairment is the charge recorded in profit and loss for expected credit losses on financial instruments. It was sharply higher than a year ago but much lower than the previous quarter, so profit before tax and profit after tax rebounded sequentially but barely moved year on year .
For the half year, impairment was Rs 605 crore against Rs 433 crore a year ago, while profit after tax was Rs 892 crore against Rs 796 crore . Yield fell more than funding cost from a year ago, so spread compressed while margin improved .
Loan book grew even as fresh sanctions slowed
Sources: 30-Sep-25, 31-Mar-26, 30-Sep-26 — ; 30-Jun-26 — .
| As on date | Outstanding loan book, Rs crore |
|---|---|
| 30-Sep-25 | 84,477 |
| 31-Mar-26 | 93,069 |
| 30-Jun-26 | 94,936 |
| 30-Sep-26 | 97,411 |
Source: .
| Half year, Rs crore | H1 FY26 | H1 FY27 |
|---|---|---|
| Sanctions | 33,148 | 23,072 |
| Disbursements | 15,043 | 17,135 |
Disbursements supported growth despite fewer approvals
Sanctions are loans approved and disbursements are loans actually paid out. The stock of outstanding loans kept rising through FY26 and into Q2 FY27 .
The loan book continued to grow alongside higher disbursements, despite lower sanctions in H1 FY27 . For the full year ended 31 March 2026, sanctions were Rs 51,883 crore against Rs 47,453 crore in the prior year and disbursements were Rs 34,946 crore against Rs 30,169 crore .
Asset quality improved from last year's spike
Source: .
| Asset quality | As on 30.09.25 | As on 31.03.26 | As on 30.09.26 |
|---|---|---|---|
| Gross NPA, Rs crore | 3,353 | 3,245 | 3,482 |
| Gross NPA ratio | 3.97% | 3.49% | 3.57% |
| Net NPA, Rs crore | 1,627 | 1,172 | 1,029 |
| Net NPA ratio | 1.97% | 1.29% | 1.08% |
| Provision coverage ratio | 51.48% | 63.88% | 70.44% |
Source: .
| Movement, Rs crore | H1 FY26 | FY26 | H1 FY27 |
|---|---|---|---|
| Opening gross NPA | 1,866 | 1,866 | 3,245 |
| Additions | 1,493 | 1,607 | 255 |
| Reductions | 6 | 228 | 18 |
| Closing gross NPA | 3,353 | 3,245 | 3,482 |
Higher provisioning lowered net stress
Gross bad loans are overdue loans before provisions and net bad loans are after provisions. Coverage shows how much of the gross stock is provided for .
The gross NPA ratio fell year on year as the loan book grew faster than gross bad loans, even though gross bad loans increased from Rs 3,353 crore to Rs 3,482 crore. Net bad loans fell from Rs 1,627 crore to Rs 1,029 crore as the stock of provisions against gross NPAs rose from Rs 1,726 crore to Rs 2,453 crore, lifting coverage and contributing to the lower net NPA ratio. Both gross and net bad-loan amounts fell from June 2026 . The longer series shows gross bad loans at Rs 1,513 crore in FY23, Rs 1,411 crore in FY24, Rs 1,866 crore in FY25 and Rs 3,245 crore in FY26 .
Court order moved one old loan to bad loans
Additions far exceeded reductions in H1 FY26 and FY26, but additions slowed in H1 FY27 . The presentation notes the step-up relates to FY 2019-20 for one borrower shifted from Stage II to NPA due to an Andhra Pradesh High Court order dated 2 July 2025 .
Manufacturing and hybrid loans gained share in solar-led book
Source: .
| Sector, Rs crore | As on 30-09-2026 | As on 30-09-2025 | As on 31-03-2026 |
|---|---|---|---|
| Solar energy | 23,437 | 19,536 | 23,851 |
| Loan facility to state utilities | 19,318 | 16,277 | 21,182 |
| Manufacturing | 12,163 | 6,186 | 8,984 |
| Wind power | 9,444 | 10,443 | 10,413 |
| Hydro power | 7,690 | 8,191 | 8,113 |
| Hybrid wind and solar | 5,787 | 3,435 | 3,712 |
Solar and state utilities still anchor the book
Solar at 24 percent and loans to state utilities at 20 percent remained the two largest blocks as on 30 September 2026 . Manufacturing rose to 12 percent from 7 percent a year ago and hybrid rose to 6 percent from 4 percent, while wind eased .
Smaller lines included smart meters at Rs 1,675 crore, green hydrogen and derivatives at Rs 713 crore and electric vehicles at Rs 576 crore, alongside ethanol at Rs 7,376 crore . Private borrowers were Rs 71,776 crore or 74 percent of the book as on 30 September 2026, against Rs 67,910 crore or 73 percent as on 31 March 2026 . Geography was spread across states, led by Rajasthan at Rs 15,738 crore or 16.16 percent, followed by Andhra Pradesh, Telangana, Tamil Nadu and Karnataka .
Bank loans now fund more than bonds
Source: .
| Borrowings, Rs crore | As on 30.09.2026 | As on 30.09.2025 | As on 31.03.2026 |
|---|---|---|---|
| Bonds | 33,180 | 32,199 | 31,679 |
| Bank, FII and cash-credit loans | 36,198 | 27,601 | 36,153 |
| Hedged foreign borrowings | 9,477 | 7,648 | 7,679 |
| Un-hedged foreign borrowings | 2,028 | 2,493 | 2,334 |
| Total borrowings | 80,882 | 69,941 | 77,846 |
Source: .
| Capital | As on 30.09.25 | As on 31.03.26 | As on 30.09.26 |
|---|---|---|---|
| Debt equity ratio | 5.41 | 5.65 | 5.64 |
| Capital adequacy, CRAR | 20.10% | 20.59% | 19.83% |
Hedging limits currency risk on foreign debt
Total outstanding borrowings were Rs 80,882 crore as on 30 September 2026. The presentation reports outstanding domestic borrowings of Rs 69,378 crore and foreign borrowings of Rs 11,505 crore, with the rounded components differing from the reported total by Rs 1 crore. Separately, Rs 10,071 crore was raised during H1 FY27; this is a period flow, not the outstanding balance . Within domestic debt, bank loans at 52 percent now exceed bonds at 48 percent, against 46 percent and 54 percent a year ago .
About 82 percent of foreign borrowings were hedged as on 30 September 2026 . Domestic long-term debt is rated AAA Stable and international debt is rated BBB Long-Term Stable with A-2 short-term from S and P Global . Net worth was Rs 14,337 crore against Rs 12,920 crore a year ago . Funding milestones included a Rs 1,247 crore perpetual debt issue in 2025 and a Rs 2,006 crore qualified institutional placement completed in June 2025, as confirmed by IREDA’s dated QIP announcement.
The deck frames demand with 308 GW of non-fossil capacity attained till 30 September 2026 against a 500 GW target by 2030 . Funding milestones cited include approval for 54EC bonds, a facility agreement with SMBC for JPY 2,800 crore in external commercial borrowing, and the IFSC arm IGGEFIL securing BBB Plus Stable rating and sanctioning its first international green loan .
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