Since its IPO last year, this energy stock has returned 1765% to its investors

Shares of EKI Energy jumped 40% in just five trading sessions; here's why.

The stock of EKI Energy jumped more than 40% from October 6, 2022, opening at Rs 1869. The price of one share went from Rs 1346 on October 6, 2022, to Rs 1953 today. The management's clarification that India is no longer restricted from exporting surplus carbon credits likely contributed to the stock's dramatic rise. The announcement comes after RK Singh, the country's Minister of Power, New, and Renewable Energy provided some explanation on the matter.

The share price has been falling from its January 2018 high of Rs 3,114 due to the news of a prohibition on the export of carbon credits. Following the release of the latest information from the Power Ministry, the stock has seen consistent buying on high volume.

EKI Energy Services Ltd provides advisory services in the areas of climate change and sustainability, carbon offsetting, and business excellence. Consulting on the validation, registration, monitoring, verification, issuance, and trading of eligible Carbon Credits Projects is part of the company's climate change advisory services, while ISO standards implementation consulting, Training and Maintenance, Lean Manufacturing Advisory Services, and Electrical Safety Audits are all part of the company's Business Excellence Advisory Services & Training Services.

In order to address the increasing demand for carbon credit-related services, the company is establishing three new international business sites in Thailand, Jordan, and Indonesia.

For the past five years, the company's profits have increased at a compound annual growth rate (CAGR) of 358%, while the company's return on equity (ROE) over the past three years has been 171%. Climate change and sustainability consulting, as well as carbon offsetting, account for 99% of income, while advisory services on business excellence and training, as well as electrical safety audits, account for 1%.

The stock is selling at a price-to-earnings ratio of 11.8 times right now. In FY21, EKI Energy generated Rs 16 crore in cash from operations, while in FY22, the company generated Rs 30 crore.