IEX Q1 Results: Net Profit Rises 21%
IEX Q1 results were declared after CERC's approval for rollout of market coupling across power exchanges. This led to the company's shares tumbling on the bourses.
Indian Energy Exchange Ltd. reported a 21% year-on-year rise in net profit for the first quarter of this financial year.
The power trading exchange recorded a standalone net profit of Rs 113.04 crore for the quarter ended June, compared to Rs 93.42 crore in the same quarter of the previous fiscal year, according to its stock exchange notification.
Revenue increased by 13.3% year-on-year for the three months ended June, reaching Rs 139.99 crore. Operating income, or earnings before interest, taxes, depreciation, and amortisation, rose 14% year-on-year to Rs 100.03 crore. The Ebitda margin expanded 40 basis points at 81.4%.
This comes after the shares of the company hit an all-time low on Thursday after the Central Electricity Regulatory Commission's approval of a phased rollout of market coupling across India's power exchanges, starting with a three-month pilot run.
The decision shifts price-setting responsibilities from individual exchanges to a central body, a development that may hurt Indian Energy Exchange, which currently handles the bulk of trade volumes and plays a key role in price discovery.
The change is aimed at improving market efficiency, but it reduces the commercial price discovery role of exchanges like IEX in determining prices. Since IEX earns most of its revenue from high-volume trading in the Day-Ahead Market and Real-Time Market segments, the shift could affect its position and profitability.
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The quarterly results were declared after the market hours. The stock settled 29.58% lower at Rs 132.32 apiece on the NSE, compared to a 0.63% decline in the benchmark Nifty 50.
IEX's shares have fallen 24.14% in the last 12 months and 27.21% year-to-date.
Out of 13 analysts tracking the company, seven maintain a 'buy' rating, three recommend a 'hold' and three suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 45.1%.
