Any current/future new fundraising through debt or equity?

As per the discussion in the call (page 12), EKI Energy Services Limited is deploying funds from its own accruals for project development and investments, particularly INR 200 crores allocated to the EMR fund to be deployed over the next 6 to 8 months. There is no explicit mention of any new fundraising through external debt or equity in the current conversation. The company is managing working capital efficiently with receivables in line with contractual agreements and maintaining liquidity. Any material updates on fundraising or strategic investments will be disclosed at the appropriate time

Any current/future capex/capital investment/strategic investment?

EKI is creating a dedicated fund in Singapore for investments, where it will act as an implementation partner, sharing benefits from generated credits. EKI plans to deploy INR 200 crores from its own accruals over the next 6-8 months for project development, including community-based and nature-based projects. Two projects have already been onboarded and invested in through a JV with Shell, with more expected in the second half of the financial year. The JV with Shell includes advisory services for projects already invested as well as those seeking investments. The nature-based projects have a

Future growth expectations in sales/revenue/volumes?

The company aims to supply around 1 billion carbon credits by 2027 in international voluntary carbon markets. Anticipates approximately 100-105 million credits supply in FY '23, a ~20% growth compared to last year. Expectation that the second half of the financial year will show stronger results than the first half, following historical trends. Price stability observed in voluntary carbon markets with average realization between $3 to $3.25 per credit; prices expected to rise due to increasing demand outpacing supply. Expansion planned into compliance emission trading schemes in India and othe

Future growth expectations in earnings/operating earnings/profits/EPS?

EKI aims to supply 1 billion carbon credits by 2027, targeting substantial growth in international voluntary carbon markets. Revenues are expected to grow with new projects in community-based and nature-based credits, which provide annuity returns over 5 to 30 years. The company anticipates approximately 20% volume growth in carbon credits supply for FY '23 compared to the previous year. EBITDA margin improved by 390 basis points in H1 FY '23, with stable pricing in voluntary carbon markets (~$3 to $3.25 per credit). Earnings are projected to benefit from onboarded projects and strategic JVs (

Current/ Expected Orderbook/ Pending Orders?

The company has contracts already in place for a high volume of carbon credits generation, covering projects at various stages such as validation, registration, secondary verification, and issuance. The order pipeline includes approximately 375.6 million credits expected by FY 2024. The company expects to deliver around 100 to 105 million credits in the current financial year. Nearly 200 million credits have already been achieved, with a goal to reach 1 billion carbon credits by 2027. Two projects are currently onboarded under the JV with Shell for investment. Additional projects exist that ha

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EKI Energy Services LtdQ3 FY22Commercial Services & Supplies

EKI Energy Services Ltd Q3 FY22 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹86.6Market Cap: ₹255 CrSector: Commercial Services & Supplies

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→The company aims to supply around 1 billion carbon credits by 2027 in international voluntary carbon markets.
→Anticipates approximately 100-105 million credits supply in FY '23, a ~20% growth compared to last year.
→Expectation that the second half of the financial year will show stronger results than the first half, following historical trends.
→Price stability observed in voluntary carbon markets with average realization between $3 to $3.25 per credit; prices expected to rise due to increasing demand outpacing supply.
→Expansion planned into compliance emission trading schemes in India and other developing nations within 3-5 years.
→Growth driven by rising corporate net-zero commitments globally and increasing demand in voluntary and emerging compliance markets.
→Additional growth opportunities expected from developing domestic emission trading schemes and plastic credit markets.
→Overall market size for voluntary carbon credits projected by researchers to reach USD 50 billion to USD 100 billion by 2030.

Margin guidance

Category 3

→EKI aims to supply 1 billion carbon credits by 2027, targeting substantial growth in international voluntary carbon markets.
→Revenues are expected to grow with new projects in community-based and nature-based credits, which provide annuity returns over 5 to 30 years.
→The company anticipates approximately 20% volume growth in carbon credits supply for FY '23 compared to the previous year.
→EBITDA margin improved by 390 basis points in H1 FY '23, with stable pricing in voluntary carbon markets (~$3 to $3.25 per credit).
→Earnings are projected to benefit from onboarded projects and strategic JVs (e.g., with Shell) that are expected to ramp up in the second half of the year.
→The equity is expected to stabilize and grow, with improved cash flows from operations (INR 151.3 crores in H1 FY '23).
→Overall, moderate to strong growth in profitability and EPS is expected as volume and credit issuance increase over the next 1-3 years.

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Fundraise plans

→As per the discussion in the call (page 12), EKI Energy Services Limited is deploying funds from its own accruals for project development and investments, particularly INR 200 crores allocated to the EMR fund to be deployed over the next 6 to 8 months.
→There is no explicit mention of any new fundraising through external debt or equity in the current conversation.
→The company is managing working capital efficiently with receivables in line with contractual agreements and maintaining liquidity.
→Any material updates on fundraising or strategic investments will be disclosed at the appropriate time.
→Currently, the focus appears to be on organic growth and internal accrual deployment rather than external fundraising.

Order book

Yes

→The company has contracts already in place for a high volume of carbon credits generation, covering projects at various stages such as validation, registration, secondary verification, and issuance.
→The order pipeline includes approximately 375.6 million credits expected by FY 2024.
→The company expects to deliver around 100 to 105 million credits in the current financial year.
→Nearly 200 million credits have already been achieved, with a goal to reach 1 billion carbon credits by 2027.
→Two projects are currently onboarded under the JV with Shell for investment.
→Additional projects exist that have already received investments from other investors, for which the company provides advisory services.
→Specific details regarding investment amounts and credit types, especially involving Shell, remain confidential for now.

Capex plans

Yes

→EKI is creating a dedicated fund in Singapore for investments, where it will act as an implementation partner, sharing benefits from generated credits.
→EKI plans to deploy INR 200 crores from its own accruals over the next 6-8 months for project development, including community-based and nature-based projects.
→Two projects have already been onboarded and invested in through a JV with Shell, with more expected in the second half of the financial year.
→The JV with Shell includes advisory services for projects already invested as well as those seeking investments.
→The nature-based projects have a gestation period of 4-6 years, with credit revenues expected to start after this period.
→Investments are confidential currently, with specific disclosures planned at the right time.

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