IEX is currently trading at Rs 134, a 55% low from the 52-week high price. Indian Energy Exchange is a Power Exchange, licensed by the Central Electricity Regulatory Commission (CERC) for spot trading in power/electricity and trading of Renewal Energy Certificate (REC) and Energy Saving Certificates (ESCerts). The main activity of the company is to provide an automated platform and infrastructure for carrying out trading in electricity units for physical delivery of electricity.
What caused the share price fall?
🔽 Poor Quarterly results: For the quarter that ended 30 June 2022, IEX reported a total income of Rs 1134 million, 12% lower QoQ, and a net profit of Rs 686 million, 21% lower QoQ.
🔽 Losing the Monopoly status: IEX along with Power Exchange India (PXIL) were the only companies operating in the power exchange sector. But recently, Hindustan Power Exchange (HPX) came into operation and is excepted to threaten the market share of IEX which might concern the shareholders.
🔽 Consolidation: Post-pandemic, IEX share price has rallied over 724% from a low of Rs 38.65 to an all-time high of Rs 318.65 till October 2021. Eventually, as the business cycle comes to a circle the share is expected to consolidate. Coupled with the factors of interest rate hikes which led to FII flight and poor quarterly performance, the company is witnessing a massive price shift in the recent past.
Have a look at the IEX chart from the past 6 months:
