Indian Energy Exchange (IEX)

Personally this sounds more of a wishful headline to me. Volume growth also has to be looked in the context of the expensive valuation (my personal opinion) and near to medium term growth potential. Average electricity price is still high compared to the guidance given by management earlier (<=3) at which they think traded volume growth shoots up.

Disclaimer: Have minor holding and watching closely before going big

3 Likes

Very Poor result.

2 Likes

Not bad, actually. Seems the current price already discounts this and the stock may do somewhat better. IGX volumes also seem to be picking up. I haven’t gone through the results closely yet, not sure if they report revenues for IGX separately or if they only report volumes.

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Q3FY23 result Update:
Indian energy exchange released its Q3FY23 results on January 20, 2023 sharing some of the key points from the same.

  1. First of all a very detailed investor presentation of about 46 pages. For those who have recently started tracking IEX, recommending them to go through the same.

  2. **The problem of high prices of e-auction of coal continued in this quarter as well. The electricity volumes witness a growth of 9% QoQ and a decline of 2% YoY.

  3. There is a major decline in REC volumes. Last year There was a stay by the appellate tribunal for electricity for the trading of REC for the period of 16 months. Due to this reason, there was a pent-up demand in Q3FY22. Hence Q3FY22 is not a comparable base as far as REC is concerned.

  4. As far as the Gas segment is concerned, segment revenue has not been disclosed for the past 2 Qtrs. On a volume basis, the company has disclosed in the investor presentation that it has achieved YoY growth of 568%. The current active clients are 120+, PAT is Rs 12.76 Crore which is 427% up QoQ and 1437% YoY. Also, the company launched GIXI which represents volume weighted average price for all gas traded on any day.

  5. On a consolidated basis, revenue for the quarter increased by 3.1% QoQ, from Rs. 113.8
    Cr. in Q2FY’23 to Rs. 117.4 Cr. in Q3FY’23. PAT grew by 8.4% QoQ from Rs. 71.2 Cr. to Rs.
    77.2 Cr. with a margin of 66%.

  6. This qtr company has incorporated a wholly owned subsidiary for International carbon exchange. Almost 500 million units of carbon credits are traded globally and by 2030, India will sell almost 200 million units of carbon credits with demand from corporates alone of 120-130 million.

  7. Future opportunities/ growth triggers

  1. Company working with the ministry of coal to set up coal exchange.
  2. Also developing new products such as HP DAM and ancillary markets.
  3. Coal prices expected to stabilize ( 100% FDI allowed for commercial mining, auction completed for 46 Blocks, Coal India Limited has offered 20 discontinued coal mines for reopening on a revenue sharing basis.
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  • They guided that the company would be able to maintain their 5-year CAGR growth of ~20% in revenue, going forward if the market situations are conducive.
  • The management guided that the high prices of e-auction coal to come down after the month of August or September 2023, as in the summer season power demand is high.
  • IEX Forms Wholly Owned Subsidiary to Explore Business Opportunities in Carbon Market.
  • IEX is working with Ministry of Coal to explore options for setting up Coal Exchange. Coal Prices are expected to stabilize in the coming quarters.
  • Robust Volume Growth expected in IGX. As LNG prices moderate, volumes will increase. Launched Index GIXI for tracking of Gas Prices.
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Has anyone done calculation of how much electricity we will need if 50% of passenger transportation will become electric. This can be a big tailwind for India’s power sector in coming decade and in turn for IEX.

The calculation would need total passenger Kms driven annually in India and how much power would be needed.

3 Likes