Valuations for IRDEA are insane and currently stock is even more expensive than Bajaj Finance on price to book. They are in a lending business…period. Whether they lend to renewable sector or a sweetshop, underlying fundamentals of a lending business don’t change.

Given that Energy sector and especially renewable has hit a purple patch (refer to article below) with stocks trading at ridiculous valuations, IREDA is just lucky to catch the wave… Once the euphoria subsides, stock might correct heavily or see itself in a long term consolidation. Those who are sitting at 4-5x profit on IPO listing, might consider taking some profit off the table.

Some of the key points from earning presentation are (Q3 FY2024):

DFPCL has successfully commissioned its greenfield ammonia plant, which reduces its risk exposure from ammonia to downstream products and enhances its efficiency and competitiveness. The plant has also received state-approved incentives that are expected to kick in during this year.

DFPCL’s mining chemicals business (TAN) is facing challenges from increased imports from Russia, but expects the demand to remain stable in Q4 FY24. The company is also exploring export opportunities for its high-quality LDAN product.

DFPCL’s pharma and specialty chemicals business (IPA and nitric acid) is witnessing a recovery in demand and prices after a period of low demand from downstream industries and imports of nitroaromatics from China. The company has also commissioned a new solar grade nitric acid plant that is expected to have better volumes.

DFPCL’s fertilizers business (CNB) is impacted by lower-than-average rainfall, limited water for irrigation, and unseasonal rains and hailstorms in its core markets. However, the company is launching innovative and crop-specific products such as Solutek and Croptek that are gaining acceptance among the farmers. The company also expects a good fertiliser Kharif season with the prediction of normal monsoon for the current year.

DFPCL has reduced its promoters’ pledge to zero and has no encumbrance of any kind on its promoters’ holding. The company also has a diversified and reputed institutional investor base that includes International Finance Corporation, Axis Mutual Fund, BNP Paribas Financials, Habrok Capital, Life Insurance Corporation, Aequitas, Government Pension Fund, New India Assurance, Vanguard and Abu Dhabi Investment Authority among others.

SBIN weekly break from FLAG with volumnes

Please add detailed risk analysis & disclosure of your holding. You had already created the thread on this company but did not comply. Till you comply, the thread remains locked.