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  • 20 Oct 2022
  • ICICIdirect Research

IEX REPORTED A WEAK OPERATIONAL PERFORMANCE IN Q2FY23

IEX - 171 Change: -2.94 (-1.69 %)

News:

·  Numbers were a miss to our estimates on all fronts, Revenue were a tad lower than our estimates. Employee cost and Other Expenses are also higher than our estimates which led to lower than expected EBITDA margin. PAT was close miss to our estimates cushioned by higher than expected other income.

 

·  Revenue for the quarter came in at Rs 95.2 crore, down 13.8% YoY (vs. I-direct estimate of Rs 97.1 crore). IEX’s total volume for Q2FY23 stands at 23117 MUs vs 25856 MUs in same quarter last year and 23439 MUs in Q1FY23, a de-growth of 10.5% YoY and 1.3% QoQ. Declining volumes are due to CERC imposing a capping of Rs 12 on all the segments of power exchanges

 

·  IEX registered an EBIDTA margin of 82.9% vs 82.4% QoQ, Absolute EBIDTA came in at Rs 78.9 crore, vs. Rs 81 crore in last quarter (I-direct estimate of Rs 83.8 crore). The surprise came in from higher other expenses which stood at Rs 7.5 crore vs. our expectation of Rs 5.4 crore

 

·  Tracking its operating performance, IEX ended the quarter with a PAT of Rs 71.2 crore vs (I-direct estimate of Rs 71.6 crore) vs. Rs 69.1 crore in Q1FY23. Other income came in at Rs 18.6 crore

View:

 IEX’s volumes are declining QoQ for two consecutive times. It is mainly due to CERC imposing a capping of | 12 on all the segments of power exchanges which has forced buyers and sellers into bilateral agreement. Apart from that launch of new Power Trading platform Hindustan Power has also challenged IEX monopoly and has adverselt impacted the volumes. On positive front Government’s plan to launch a high-price market specifically for gas-fired and battery storage plants in coming three months will prove to be a boost for IEX volumes. We have changed our stance from Positive to Neutral keeping in view the challenges in near term.

Impact:

Neutral.