Shares of this energy services company jumped 40 per cent in five trading sessions; here's why

The stock rose from Rs 1346 on October 6 to Rs 1953 today.

Shares of EKI Energy opened at Rs 1869 after rising by more than 40 per cent since October 6, 2022. The stock rose from Rs 1346 on October 6, 2022, to Rs 1953 today. This sharp increase in the stock price was seen as the management clarifies that now there is no ban on India for exports of surplus carbon credits. The declaration follows a clarification by the country's Minister of Power, New and Renewable Energy - RK Singh.

From January this year, the stock fell from the level of Rs 3114 as the news came on banning the export of carbon credits. Due to the recent news from the Power Ministry, the stock witnessed only buyers with strong volume spurts.

EKI Energy Services Ltd is engaged in the business of climate change and sustainability advisory and carbon offsetting, along with business excellence services. Its climate change advisory services include consultancy for validation, registration, monitoring, verification, issuance and trading of eligible Carbon Credits Projects and its Business Excellence Advisory Services & Training Services involve ISO standards implementation consultancy, Training and Maintenance, Lean Manufacturing Advisory Services, and Electrical Safety Audits.

The company is opening three new international business points in Thailand, Jordan, and Indonesia, to meet the growing demand for services related to carbon credits.

The company has delivered good profit growth of 358 per cent CAGR over the last 5 years along with a good return on equity (ROE) track record of 171 per cent ROE for 3 years. 99 per cent of revenue is generated from Climate Change and Sustainability Advisory and Carbon Offsetting, other 1 per cent is from Business Excellence Advisory & Training Services & Electrical Safety Audits.

Currently, the stock is trading at a PE of 11.8 times. Companies cash flow from operations in FY21 was Rs 16 crore and in FY22 EKI Energy generated Rs 30 crore of cash from its operations.