Indian Energy Exchange (IEX)

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.