The shares of this Microcap stock engaged in the business of Carbon credit offsetting, carbon advisory services, and implementation and development of carbon credit were up 12 percent in intraday trade after COP29’s Agreement on Carbon Markets.
Share Price Movement
The share price of EKI Energy Services Ltd on Monday was up by 12 percent in intraday trade and touched a day’s high of Rs.283.90 per share. The stock has delivered a negative return of around 35 percent thus underperforming the index. However, the shares have adjusted from the day’s high and closed at 264.20 percent higher than the previous closing price of Rs. 253.10 per share.
What Happened
EKI Energy Services Ltd celebrates achievement at COP29, where countries finalized agreements on carbon market mechanisms under the Paris Agreement’s Article 6, specifically Articles 6.2 and 6.4.
The rules suggest Article 6.2 which is for country-to-country trading and Article 6.4 resembles a centralized carbon crediting mechanism. After negotiations, these frameworks provide clarity on carbon credit authorization and tracking, ensuring environmental integrity. This empowers nations to implement climate plans efficiently, aimed at cutting global emissions by 2030. While the agreements pave the way for a transparent carbon market, challenges remain in establishing standards to ensure credibility. COP29 also advanced transparency through improved reporting frameworks, marking a crucial step in global climate action.
Management Commentary
Mr. Manish Dabkara, Chairman and Managing Director of EKI Energy Services praised the recognition of carbon markets as crucial in combating climate change. He highlighted the importance of transparency and initiatives like #Together4Transparency for fostering collaboration.
The UK pledged £3 million to support REDD+ efforts, enhancing transparency and technical dialogue to reverse deforestation by 2030. EKI welcomed the UN Climate Conference’s commitment to triple annual climate finance for developing countries to $300 billion by 2035 but noted that this falls short of the $1.3 trillion requested. EKI remains committed to supporting global climate action and emphasizes the need for robust standards in carbon markets while urging stakeholders to prioritize innovation and inclusivity in climate solutions.
Financials
According to its recent filing, In Q2FY25, EKI Energy Services Ltd reported an 81 percent increase in revenue to Rs.143.12 crore in Q2FY25, compared to Rs.78.95 crore in Q2FY24. Furthermore, quarterly, the company saw a decline of 20 percent in revenue from Rs.178.21 crore in Q1FY25.
In the same period, the company reported an improvement and turned a profit of Rs.4.22 crore in Q2FY25, as compared to losses of Rs.43.48 crore in Q2FY24 and further improved their profitability from a profit of Rs.0.04 crore in Q1FY25.
The company has a current ratio of 6.01, a debt-to-equity ratio of 0.08, and an EV-to-sales of 0.97 currently.
Revenue Mix
The company recognizes its revenue from climate change and sustainability advisory and carbon offsetting along with business excellence service as their segment. Under this category, they have recognized two segments which are the trading segment which contributes around 88.40 percent and the generation segment (sale of carbon credits) contributes around 11.6 percent as of H1FY25.
Shareholding Pattern
As of September 2024, the shareholding pattern includes promoters holding a share of 73.41 percent stake in EKI Energy Services, and remaining public holdings stood at 26.59 percent.
About the company
EKI Energy Services Ltd. is a leading global provider of carbon market solutions, which is headquartered in Indore, India. The company was founded in 2008, the company specializes in carbon credit development and supply, offering services such as carbon offsetting, sustainability consulting, and climate change advisory.
They operate in over 16 countries, serving more than 3,500 clients, and have mobilized over 200 million carbon offsets to date. The firm focuses on promoting eco-friendly practices and aims to contribute to a net-zero future through innovative climate solutions and community-based projects.
Written by – Santhosh S
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.
