IREDA Q2 FY27 Results Analysis: PAT Flat as Impairment Surges 167%, NNPA at Five-Quarter Low

IREDA's Q2 FY27 numbers came in mixed, with revenue of Rs. 2,343.70 Cr (+13.94% YoY) and PAT growth of +0.96% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

IREDA grew revenue 13.94% YoY and operating profit 16.39% YoY, with operating margin at 38.56% (+81 bps YoY) and asset quality improving — GNPA at 3.57%, NNPA at a five-quarter low of 1.08%, and Stage III provision coverage at 70.44%. PAT was flat at 0.96% YoY as impairment rose 167% YoY, though it fell 55% QoQ to Rs.186.81 Cr. Governance remains an overhang with the Audit Committee unconstituted since March 2026, NSE/BSE fines, and an auditor emphasis of matter.

Key Investment Insights

Key Positives

• Loan book grew 14.57% YoY to Rs.93,961.30 Cr; NII grew 15.10% YoY to Rs.940.49 Cr
• Operating profit (PBT + depreciation + impairment) grew 16.39% YoY to Rs.903.65 Cr; operating margin expanded 81 bps YoY and 115 bps QoQ to 38.56%
• GNPA improved to 3.57% (from 3.76% QoQ and 3.97% YoY); NNPA at 1.08%, lowest in the five-quarter trend
• Provision coverage ratio on Stage III assets rose to 70.44% from 51.48% a year ago
• Operating opex grew only 4.64% YoY against revenue growth of 13.94%
• Impairment charge fell 55.37% QoQ to Rs.186.81 Cr from Rs.418.54 Cr in Q1FY27
• H1FY27 PAT of Rs.891.75 Cr grew 12.07% YoY; H1 operating profit grew 20.04% YoY

Risk Factors

• Impairment on financial instruments rose 167.18% YoY to Rs.186.81 Cr, holding PAT growth to 0.96% YoY against revenue growth of 13.94%
• Audit Committee not properly constituted since March 28, 2026; NSE and BSE each fined IREDA Rs.14,19,540 for board/committee composition breaches
• Rs.386.76 Cr of accounts classified as Stage II/Standard per interim High Court orders would be NPA per RBI prudential norms; interest on these accounts recognized on a collection basis
• CRAR declined 27 bps YoY to 19.83% while debt-equity ratio rose to 5.64x from 5.41x