Results Update Q4FY23 - IEX Net Profit Rises 14% YOY to Rs 88 Crore in Quarter 4 & Declared Dividend of Rs 1 Per Share

By -


Indian Energy Exchange (IEX), the country’s leading power trading platform, has announced its financial results for the quarter and year ended March 31, 2023. The company has reported a robust performance in terms of revenue, profit, and dividend despite the challenges posed by the Covid-19 pandemic.

In this blog post, we will cover the key highlights of IEX’s Q4FY23 results, the factors that contributed to its growth, and the outlook for the future. We will also compare IEX’s performance with its peers and competitors in the power sector.

What is IEX and why is it important?

IEX is India’s first and largest energy exchange that enables efficient and transparent trading of electricity and related products. It operates various market segments such as the day-ahead market, real-time market, green market, term-ahead market, and renewable energy certificates market.

IEX plays a vital role in facilitating price discovery, enhancing competition, ensuring reliability, and promoting sustainability in the power sector. It also helps consumers save on their electricity bills by providing them access to competitive prices and diverse sources of power.

How did IEX perform in Q4FY23?

IEX delivered a strong performance in Q4FY23, driven by higher volumes, improved product mix, and operational efficiency. 

Here are some of the key highlights of its Q4FY23 results:

  • The company’s consolidated net profit increased by 14% year-on-year (YOY) to Rs 88.40 crore in Q4FY23, compared to Rs 77.2 crore in Q3FY23 and Rs 60.85 crore in Q4FY22.
  • The company’s consolidated total income rose by 1% YOY to Rs 112.6 crore in Q4FY23, from Rs 111.5 crore in Q3FY23 and Rs 100.33 crore in Q4FY22.
  • The company’s board declared a final dividend of Rs 1 per equity share of Rs 1 each for the financial year 2022-23, subject to shareholders’ approval. This is in addition to the interim dividend of Rs 2.50 per share paid in February 2023.
  • The company’s earnings per share (EPS) stood at Rs 2.64 in Q4FY23, up from Rs 2.31 in Q3FY23 and Rs 1.82 in Q4FY22.
  • The company’s return on equity (ROE) was 29.8% in Q4FY23, compared to 28.6% in Q3FY23 and 25.9% in Q4FY22.
  • The company’s return on capital employed (ROCE) was 32.9% in Q4FY23, compared to 31.7% in Q3FY23 and 28.8% in Q4FY22.

What were the factors that contributed to IEX’s growth?

IEX witnessed a strong growth momentum across all its market segments in Q4FY23, as the demand for power recovered from the impact of the Covid-19 pandemic. The company also launched new products and services to cater to the evolving needs of its customers and stakeholders.

Some of the factors that contributed to IEX’s growth are:


  • The day-ahead market (DAM), which accounts for about 80% of IEX’s revenue, recorded a volume growth of 9% YOY to 16.8 billion units (BU) in Q4FY23. The average market clearing price (MCP) was Rs 3.86 per unit, up by 13% YOY. The DAM witnessed high participation from both buyers and sellers, as well as increased cross-border trade with Nepal and Bangladesh.
  • The real-time market (RTM), which was launched in June 2020, achieved a volume of 3 BU in Q4FY23, registering a growth of 18% quarter-on-quarter (QOQ). The RTM offers flexibility and convenience to customers who need power on an immediate basis. 
  • The green market, which comprises of green day-ahead market (G-DAM) and green term-ahead market (G-TAM), recorded a volume of 1.1 BU in Q4FY23, registering a growth of 64% QOQ. The G-DAM was launched in October 2020 and the G-TAM was launched in January 2021 to facilitate the trade of renewable energy.The average MCP for G-DAM was Rs 4.07 per unit and for G-TAM was Rs 4.84 per unit in Q4FY231.
  • The term-ahead market (TAM), which offers contracts for up to three months, achieved a volume of 1.8 BU in Q4FY23, witnessing a growth of 27% YOY. The average MCP for TAM was Rs 5.26 per unit in Q4FY23. The TAM provides flexibility and certainty to customers who need power for longer durations.
  • The renewable energy certificates (RECs) market, which enables obligated entities to meet their renewable purchase obligations (RPOs), resumed trading in January 2021 after a gap of seven months due to regulatory interventions. The REC market traded 0.6 million certificates in Q4FY23, with an average clearing price of Rs 1,000 per certificate.

How does IEX compare with its peers and competitors?

IEX is the dominant player in the power exchange market in India, with a market share of nearly 100% in the collective transactions segment. It competes with two other power exchanges - Power Exchange India Limited (PXIL) and Indian Gas Exchange Limited (IGX).

PXIL is a joint venture between National Stock Exchange (NSE) and National Commodity & Derivatives Exchange (NCDEX). It offers products such as day-ahead market, term-ahead market, renewable energy certificates, and energy saving certificates. PXIL has a market share of less than 1% in the collective transactions segment.

IGX is a wholly-owned subsidiary of IEX that operates a gas exchange platform for trading natural gas and related products. It was launched in June 2020 and offers products such as day-ahead market, term-ahead market, and gas storage services. IGX has a market share of over 90% in the gas exchange market in India.

What is the outlook for IEX’s future growth?

IEX has a positive outlook for its future growth, as it expects the demand for power and renewable energy to increase in the post-pandemic scenario. The company also plans to launch new products and services to cater to the evolving needs of its customers and stakeholders.

Some of the initiatives that IEX is working on are:


  • Launching long-duration delivery-based contracts for up to one year to provide more flexibility and certainty to customers.
  • Developing a cross-border electricity trade platform to enable seamless trade of power with neighboring countries such as Nepal, Bhutan, Bangladesh, Myanmar, and Sri Lanka.
  • Expanding its green market portfolio by introducing new products such as green intra-day contracts, green day-ahead contingency contracts, and green term-ahead contracts.
  • Leveraging its subsidiary IGX to tap into the potential of the natural gas market and offer integrated solutions for power and gas trading.

Disclaimer

This blog post is based on publicly available information from various sources such as news articles, company websites, regulatory filings, etc. It is not intended to provide any investment advice or recommendation. The readers are advised to do their own research and analysis before making any investment decisions based on this blog post. The author does not own any shares or have any affiliation with IEX or any of its competitors.

Comments

Post a Comment

Popular posts from this blog

Deccan Gold Mines Up 150% in a Year, Makes Major Lithium Move in Mozambique

By -
Image
The country's only listed gold exploration and mining company Deccan Gold Mines Limited (DGML) acquired majority stake in 5 lithium blocks in Mozambique, Africa  Deccan Gold Mines Limited (DGML), India's sole listed gold exploration and mining company, has recently made a significant move that has caught the attention of investors worldwide. The company has acquired a majority stake in five lithium blocks in Mozambique, Africa, positioning itself within the globally recognized Alto Ligonha pegmatite belt, known for its abundant reserves of lithium-cesium-tantalum (LCT) pegmatites. {jistoc} $title={Table of Contents} A Strategic Acquisition This acquisition is crucial for the mining of lithium, tantalum, and beryllium. The critical mineral concession block has been procured through Deccan Gold FZCO, a wholly-owned subsidiary of DGML. DGFZCO will hold a majority ownership stake of 51% in DGMOZ, with the potential for this ownership to increase to 70% in the near...
Read more

Small Cap Gem: Sakuma Exports Doubles in 2024, Bonus Share Proposal on July 1st?

By -
Image
Sakuma Exports: A Smallcap Stock with Big Returns in 2024 In the world of stock trading, smallcap stocks often go unnoticed. However, one such stock has been making waves in the Indian stock market - Sakuma Exports Ltd. This company, engaged in the buying, processing, marketing, exporting, and importing of agricultural products, has seen its share price double in the calendar year 2024. {jistoc} $title={Table of Contents} A Stellar Performance As of Thursday, June 20, the Sakuma Exports stock price has recorded a nearly 100% year-to-date gain , hitting the day’s high of ₹37.86 apiece on the NSE. This impressive performance is not a sudden phenomenon but the result of a strong run over the past couple of months. The company's shares have been on a steady upward trajectory, reflecting the positive sentiment among investors. The surge in the stock price is a testament to the company's robust business model and its ability to deliver consistent growth. Bonus Issue ...
Read more

Simple Investing: It's Not Rocket Science (But It Takes More Than Luck)

By -
Image
Successful Investing: Simple, But Not Easy Disclaimer:  This blog post is for informational purposes only and should not be taken as financial advice. Always do your own research and consider seeking advice from a certified financial advisor before making any investment decisions. {jistoc} $title={Table of Contents} The Myth of Easy Wealth The bull market of the 1990s created a myth that the stock market was essentially a high-return savings account. This belief was fueled by the ease of access to financial information and the ability to trade stocks online. However, as many investors discovered when the bubble burst, if something looks too good to be true, it usually is. Investing requires more than just opening an online account and watching financial news. It requires a deep understanding of the market, the ability to analyze and interpret financial data, and the discipline to stick to your investment strategy even when the market is volatile. It also requires...
Read more