Why EKI Energy Services Share Price is Rising

India's rapid economic growth has led to a surge in electricity demand, straining the power grid. To address this, the country has been transitioning towards a more market-oriented power sector.

This shift has given rise to power exchanges, platforms where electricity is traded like a commodity.

The growing volume of electricity traded on these exchanges has presented significant opportunities for intermediaries who can efficiently match buyers and sellers.

Speaking of power trading, EKI Energy Services recently forayed into power trading.

As a power trading intermediary, the company facilitates electricity transactions between power generators, distribution companies, and large consumers.

Lately, its share price was grappling with headwinds. It dropped 10.2% in 2024.

But a recent turnaround is evident, with the stock rallying 13.3% in the last five days.

What has sparked this sudden resurgence?

Let's delve deeper.

#1 Strong Quarterly Results

EKI Energy Services reported robust financial results for Q1 FY25. The company declared these strong results due to its strategic entry into the power trading sector. This new venture significantly boosted consolidated revenue.

Power trading alone contributed Rs 1.4 billion (bn) out of the total Rs 1.8 bn in revenue for the Q1 FY25.

The company's profit after tax (PAT) also rose during this quarter. It reported a total net profit of Rs 37.7 million (m) which is significantly higher compared to the Rs 33.3 net loss reported a year ago. This the first time the company has reported a profit.

It also reported a positive earnings before interest, tax, depreciation, and amortisation (EBITDA) for the first time. In Q1 FY25 its EBITDA stood at Rs 354.5 m and its EBITDA margin for the quarter is 0.2%

The management anticipates continued growth in turnover and margins in the upcoming quarters.

#2 Strategic Initiatives

EKI Energy Services has taken big leap in the clean energy sector. The company has invested in decarbonisation initiatives, such as cook stoves and bio-briquette production.

These investments have begun generating revenue, with the bio-briquette production factory supplying over 200 tonnes since April 2024.

EKI also formed a partnership with FARI Solutions to enhance competitiveness in carbon credit processes. This partnership focuses on promoting sustainable practices ahead of COP29 in Azerbaijan.

Furthermore, the company launched an AI-powered ESG compliance platform through its associate WOCE Solutions. This platform is designed to assist clients in their decarbonisation journey and ensure compliance with environmental, social, and governance standards.

What Next?

EKI's strong financial performance and strategic entry into power trading position it well for continued growth. The company's long-term vision includes expanding its presence in the clean energy sector.

It aims to leverage its expertise in high-quality carbon offset projects to achieve this.

By focusing on projects that generate verifiable and impactful carbon credits, EKI plans to solidify its market position and contribute to global sustainability goals.

To support stakeholders, the company is advancing carbon credit trading schemes and regulatory frameworks.

One such framework is India's Carbon Credit Trading Scheme (CCTS) 2023. This scheme is expected to create significant demand for carbon credits and drive innovation in clean technologies.

The CCTS will provide a structured market for trading carbon credits, encouraging more companies to adopt sustainable practices and reduce their carbon footprints.

The company plans to continue investing in clean energy projects and expanding its portfolio of decarbonisation initiatives. By doing so, it aims to maintain its leadership position in the carbon credit market and support global efforts to combat climate change.

Furthermore, the company intends to enhance its engagement with clients and stakeholders by providing comprehensive support for their decarbonisation journeys. This includes offering tailored solutions and leveraging advanced technologies like the AI-powered ESG compliance platform developed by WOCE Solutions.

In summary, EKI Energy Services is strategically positioned for future growth. The company's commitment to sustainability and its proactive approach to addressing climate change will continue to drive its success in the coming years.

How EKI Energy Services Share Price has Performed Recently

In the past five days, EKI Energy Services share price has rallied 13.3%. In the last month, it is up 11.9%.

In 2024, so far its share price is down 10.2%. Additionally, it is down rallied 12.7% in the last one year.

The stock touched its 52-week high of Rs 717.9 on 21 September 2023 and a 52-week low of Rs 268.1 on 01 April 2024.

About EKI Energy Services

EKI Energy Services is a premier carbon credit developer and supplier across the globe.

It offers services in climate change advisory, carbon credits trading, business excellence advisory, and electrical safety audits.

The company has established EKI Power Trading which deals in the business of power trading. The subsidiary acquired a Category IV license from CERC to engage in power trading.

To know more about the company, check out EKI ENERGY SERVICES company fact sheet and quarterly results.

For a sector overview, read our software sector report.

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

Happy Investing.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...