IREDA Stock Soars 15% in 1 Week: Headed for All-Time High?

IREDA stock is on a tear, surging 15% in a week! Analysts are bullish, citing potential tax breaks and government support for clean energy. The stock is nearing its all-time high, but faces resistance near Rs 200. Buy on a breakout?

CONTENTS: IREDA Stock Soars 15% in 1 Week

• IREDA Up 15% in Week
• Tax Break for IREDA Bonds
• IREDA: Buy on Breakout

Shares of Indian Renewable Energy Development Agency (IREDA) Limited surged over 4.5% to reach ₹205.10 each on the NSE. On Wednesday, the stock saw a notable jump of over 8% before closing with a 5.21% gain. The session witnessed heavy trading volumes, with 63.24 lakh shares traded on the BSE and 10.05 crore shares on the NSE.

As the Budget 2024 session approaches, investors are increasingly eyeing stocks that could benefit from the upcoming announcements. The Budget Session of Parliament is set to begin on July 22 and continue until August 9, 2024. The first session of the 18th Lok Sabha started on June 25, 2024, and will run until July 4. Over the past week, IREDA’s shares have climbed nearly 15%, reflecting growing investor interest.

IREDA Stock Soars 15% in 1 Week: Media reports suggest that the upcoming Union Budget may introduce measures aimed at facilitating cheaper funds for IREDA. The Modi government is reportedly considering bringing two state-run entities, IREDA and HUDCO, under Section 54EC of the Income Tax Act. This move would allow investors purchasing bonds issued by these companies to be exempt from capital gains tax.

Section 54EC of the Income Tax Act presently exempts long-term capital gains (LTCG) from the sale of immovable assets like land and houses if the proceeds are reinvested in bonds issued by specified PSUs. Currently, bonds from entities like Rural Electrification Corp. Ltd (REC) and Power Finance Corp. (PFC) qualify for such exemptions.

IREDA Stock Soars 15% in 1 Week: According to Osho Krishan, Senior Analyst at Angel One, IREDA is currently on an upward trajectory and comfortably positioned above its key Exponential Moving Averages (EMAs) on the daily chart. The stock has been gaining momentum steadily since the start of the new financial year and is approaching its all-time high.

Krishan noted that from a technical standpoint, IREDA has strong support in the range of Rs 170-160, which could benefit buyers during any market dips. However, breaking through the resistance zone of Rs 195-200 poses a challenge for bullish momentum. A decisive breach of this level could potentially trigger the next phase of the rally in the short to medium term.

Earlier, Choice Equity Broking assigned a BUY rating to IREDA shares with a target price of Rs 203. Market expert Gaurang Shah advised investors to HOLD the stock, anticipating a favorable environment for clean and green energy under the new government, which he believes bodes well for IREDA’s future.

Another expert highlighted that IREDA shares have been trading sideways post-election results. A breakout above Rs 200 could push the stock to around Rs 225, while a breach of Rs 160 might lead to downside risks towards Rs 130.