This multibagger stock stages strong rebound, jumps 48% in 3 sessions

Shares of EKI Energy Services jumped 10 per cent in Monday's trade, extending their winning run for the third straight session. The multibagger stock surged 10 per cent to hit its upper price band of Rs 757 over a previous close of Rs 688.20. The scrip has gained 47.87 per cent from its one-year low level of Rs 511.95, touched last Friday.

EKI Energy rebounded sharply after the government finalised a list of activities that would be taken into account for selling carbon credits, in compliance with Article 6.2 of the Paris Agreement. The list includes Greenhouse Gas (GHG) mitigation activities, alternate materials, and removal activities. The step would please investors in the carbon credit market, EKI Energy said.

The stock plunged sharply last week after the carbon credit developer's new auditor raised concerns over its financial statements. Walker Chandiok & Co allegedly cited non-compliance with accounting standards and revenue recognition norms. EKI Energy, however, refuted the allegations.

The stock was listed on April 7, 2021, at around Rs 35 (adjusted for bonus) and hit its 52-week high of Rs 2,964 on July 6, 2022. EKI Energy's board approved bonus shares issue in the ratio of 3:1. To put simply, for every single share held, three additional shares were issued.

At today's high price of Rs 757, the counter has declined 74.46 per cent since then. That said, it has zoomed 1,768.67 per cent since listing in April 2021.

A total of 1.23 lakh shares changed hands on BSE, which was lower than the two-week average volume of 1.35 lakh shares. Turnover on the counter stood at Rs 9.26 crore, commanding a market capitalisation (m-cap) of Rs 2,082.59 crore. There were 80,426 buy orders today against sell orders of nil shares.

On the earnings front, EKI Energy posted a consolidated net profit of Rs 45.20 crore for the quarter that ended December 31, 2022 (Q3 FY23). Though, the exchange filing didn't provide the consolidated net profit figure for the corresponding quarter of the previous fiscal. The consolidated net profit of the company stood at Rs 106.13 crore in the previous quarter that ended September 30, 2022 (Q2 FY23). The total income stood at Rs 421.12 crore in Q3 against Rs 461.15 crore in Q2.

The stock was last seen trading higher than 5-day moving averages but lower than 20-day, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 32.02. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-book (P/B) ratio of 3.40.

EKI Energy Services has a one-year beta of 0.33, indicating low volatility on the counter.

"The stock price was very oversold and hence is seeing a sharp bounce back with strong resistance at Rs 750. Investors should buy only if a daily close is above this level for targets of Rs 843-941. Support will be at Rs 730," said AR Ramachandran from Tips2trades.

The company (formerly known as EnKing International) is delivering a wide range of services, in the categories of training, consulting, Energy Conservation, Carbon Credit Trading, CDM and Electrical Safety Audit, Carbon Footprint measurement and management, and many more sustainability services. EKI has been working towards rehabilitating the planet to a future of net-zero carbon emissions.

As of December 2022, promoters held a 73.44 per cent stake in the company.

Meanwhile, Indian equity benchmarks slipped into the red in afternoon deals today as losses in banks and financials countered gains in consumer goods and metal stocks. The 30-share BSE Sensex pack fell 28 points or 0.05 per cent to trade at 60,664; while the broader NSE Nifty index moved 17 points or 0.10 per cent lower to trade at 17,827.

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