IEX stock drops 2.5% despite 9% rise in traded volumes

On March 4, 2025, shares of Indian Energy Exchange (IEX) declined by 2.5 per cent, trading at Rs 151.21 on the NSE in early market hours. This drop came despite the company reporting strong growth in its traded electricity volumes for February 2025.

​In its operational update, IEX announced that electricity traded volumes for February 2025 stood at 9,622 million units (MU), reflecting a 9 per cent increase compared to the previous year.

Breaking down the performance of its key market segments:

• The Day Ahead Market (DAM) witnessed a 14 per cent year-on-year growth, reaching 5,369 MU.
• The Real-Time Market (RTM) recorded an even stronger 23 per cent annual increase, reaching 2,887 MU in February.

However, despite the increase in trading activity, the clearing price in the Day Ahead Market averaged Rs 4.38 per unit, marking an 11 per cent decline from the same period last year. This drop in clearing price could have contributed to the stock's weakness.

Company’s financials show steady growth

For the third quarter of the financial year, IEX reported a solid improvement in its financial performance:

• Total income: Rs 141.21 crore, up 20 per cent from Rs 117.34 crore in the same quarter last year.
• Revenue from operations: Rs 115.3 crore, reflecting a 15 per cent increase from Rs 100.27 crore in the corresponding period last year.
• Net profit: Rs 91.8 crore, marking an 18.9 per cent rise from Rs 77.2 crore in the same quarter last year.

Market liquidity and pricing impact

In a statement issued on January 25, IEX highlighted that an improved fuel supply situation had enhanced market liquidity, leading to a rise in sell bids for collective auctions. Sell bids grew by 25 per cent year-on-year in November 2023 and 18 per cent in December 2023. While this increase helped reduce exchange prices, it also weighed on revenue generation, influencing the stock's movement.

Despite strong growth in trading volumes and an improvement in financial performance, IEX shares faced selling pressure. The decline in market clearing prices and broader market conditions likely contributed to the negative stock sentiment. Investors may continue monitoring the impact of liquidity and pricing trends on IEX’s future performance.