EKI Energy Ltd is a global leader in the development and supply of carbon credits, offering trading, carbon advisory services, climate change, and sustainability solutions.
With a market capitalization of Rs 1,122.43 Crores. EKI Energy Ltd, On Friday, The shares closed at Rs 407.90 a share, a decrease of 0.46 percent from the previous closing price.
The stock dropped from its 52-week high of Rs 1,550 per share to Rs 407.90 per share, representing a decline of 73.68% so far.
Carbon allowances, sometimes referred to as carbon credits, serve as emissions permission slips. A company is authorized to emit one tonne of CO2 when it purchases a carbon credit, typically from the government. Firms that have carbon credits receive carbon income in a vertical fashion, and companies that have excess credits can sell them to other businesses.
Here are the reasons the stock has fallen by 73.68%
● When the company’s new auditor expressed concerns about the financial statements, the stock began to decline precipitously in February. Allegedly, Walker Chandiok & Co. cited deviations from revenue recognition guidelines and accounting standards. But EKI Energy denied the claims.
● In a letter to the BSE on July 15, EKI Energy stated that the board of directors had met on July 5 to decide to fire the auditor. The financial results for the third quarter and the nine months that ended in December 2022 were attached to a report from the auditors stating that the recognition of revenues and the associated costs did not follow accounting principles.
● The prolonged conflict between Russia and Ukraine, rising interest rates, slow global economic growth, and a decrease in discretionary spending were the main causes of the low demand for carbon credits overall, as reported by Business Times.
● Sales for the first quarter of this year dropped by 85% to Rs 62 crore from Rs 434 crore in the same period last year, with a consolidated loss of Rs 32 crore for the June quarter compared to a profit of Rs 56 crore in the same quarter last year, according to company financials.
● It was the first large-scale international carbon market, covering various sectors and greenhouse gasses within the European Union.
In conclusion, EKI Energy had a turbulent time that resulted in a significant decline in sales and a shift from profit to loss in the reported quarters due to a drop in stock value, disagreements with auditors regarding financial statements, and unfavorable external factors affecting its financial performance.
Written by:- Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
