IEX Q2 Profit Rises 13%, But Renewable Energy Certificate Trading Slumps 65% Photograph: (AI)
Original Coverage & Source Attribution: www.saurenergy.com
Indian Energy Exchange (IEX) reported a 12.9 percent year-on-year increase in consolidated net profit to Rs 139.24 crore for the second quarter of FY27, even as trading volumes in its renewable energy certificate (REC) segment declined sharply by 65.5 percent during the quarter.
The exchange’s REC trading volume fell to 15.27 lakh certificates in Q2 FY27, compared with the corresponding period last year. The decline points to a contrasting trend in IEX’s overall business, where electricity trading volumes and profitability continued to grow, while activity in the renewable energy certificate market remained subdued.
IEX’s broader Green Market segment also recorded a decline, with trading volumes falling 5.8 percent year-on-year to 2.863 billion units (BU) during the quarter. The decline in REC trading is particularly noteworthy given the growing importance of renewable energy procurement, compliance requirements and the development of market-based mechanisms for clean energy transactions in India.
Revenue growth trails electricity trading volumes
IEX’s consolidated revenue from operations increased 8.6 percent year-on-year to Rs 167.10 crore in Q2 FY27, compared with Rs 153.92 crore in the corresponding quarter last year. Total income, including other income, rose 10.7 percent to Rs 202.96 crore from Rs 183.27 crore.
Consolidated net profit increased to Rs 139.24 crore from Rs 123.35 crore, while profit before tax rose 12.6 percent to Rs 181.40 crore. The exchange’s electricity trading volumes increased 12.7 percent to approximately 39.7 BU during the quarter. However, operating revenue growth remained below volume growth, indicating a difference in revenue realisation across trading products and market segments.
The Day-Ahead Market (DAM) recorded relatively modest volume growth of 2.2 percent to 14.855 BU, while the Real-Time Market (RTM) grew 10.5 percent to 16.49 BU. Average market clearing prices also increased substantially, with DAM prices rising 46 percent year-on-year to Rs 5.7 per unit and RTM prices increasing 49 percent to Rs 5.2 per unit.
Rising expenses temper profitability
Despite the growth in revenue and net profit, IEX’s expenses increased at a faster pace. Total consolidated expenses rose 22.2 percent to Rs 32.61 crore during Q2 FY27, compared with Rs 26.69 crore a year earlier.
Other expenses recorded the sharpest increase, rising 42.4 percent to Rs 12.28 crore. Employee benefit expenses increased 14.1 percent to Rs 13.51 crore. This indicates some pressure on operating efficiency, with the increase in expenditure outpacing growth in core operating revenue.
Another contributor to consolidated profitability was Indian Gas Exchange (IGX), IEX’s associate. Its share of profit from IGX increased approximately 144 percent to Rs 11.05 crore during the quarter, compared with Rs 4.53 crore in Q2 FY26. The growing contribution from IGX has provided an additional source of earnings growth beyond the electricity exchange business.
Green energy trading remains an area to watch
The decline in REC trading volumes comes at a time when India is expanding its renewable energy capacity and strengthening the framework for renewable energy procurement and consumption. RECs provide a market-based mechanism through which renewable energy attributes can be traded separately from physical electricity. They are relevant for entities seeking to meet renewable purchase obligations and other voluntary sustainability requirements.
The fall in IEX’s REC trading activity therefore warrants attention, although a single-quarter decline does not necessarily indicate a structural contraction in the certificate market. Trading volumes can be influenced by compliance cycles, certificate availability, market participation and the timing of regulatory requirements.
The broader Green Market segment’s 5.8 percent decline also suggests that renewable-focused trading did not keep pace with the growth recorded in IEX’s overall electricity market during the quarter. The performance raises questions about the factors affecting REC participation and whether the decline reflects temporary market conditions or a longer-term change in trading patterns.
