Core Viewpoint - IDEX Corporation reported strong second-quarter 2025 results with adjusted earnings of $2.07 per share, exceeding estimates and reflecting stable performance year-over-year [1][9] Revenue Details - IDEX's net sales reached $865.4 million, surpassing the Zacks Consensus Estimate of $857 million, marking a 7% increase year-over-year [2][9] - Organic sales grew by 1% year-over-year, while acquisitions/divestitures contributed positively by 5% [2] - The Fluid & Metering Technologies segment reported net sales of $310.9 million, down 3% year-over-year [2] - The Health & Science Technologies segment saw net sales of $365.3 million, up 20% year-over-year, driven by strong organic growth and acquisitions [3] - The Fire & Safety/Diversified Products segment achieved net sales of $191.5 million, increasing 3% year-over-year [4] Margin Profile - Cost of sales increased by 7.4% year-over-year to $473.2 million, with adjusted gross profit rising to $392.2 million, up 6.9% [5] - Adjusted EBITDA was $237.2 million, reflecting a 5.7% increase year-over-year, while the adjusted EBITDA margin decreased to 27.4% [5][6] - Operating income rose to $187.9 million, up 2.8% year-over-year, with an operating margin of 21.7% [6] Balance Sheet and Cash Flow - At the end of Q2, IDEX had cash and cash equivalents of $568.2 million, down from $620.8 million at the end of Q4 2024 [7] - Long-term borrowings decreased to $1.85 billion from $1.9 billion at the end of Q4 2024 [7] - In the first half of 2025, IDEX generated net cash of $267.4 million from operating activities, down 7.9% year-over-year [8] Outlook - For Q3 2025, IDEX anticipates adjusted earnings in the range of $1.90-$1.95 per share and organic sales growth of 2-3% [11] - For the full year 2025, adjusted earnings are expected to be between $7.85-$7.95 per share, indicating a slight increase from 2024 [12]

Company Performance - Idex (IEX) reported quarterly earnings of $2.07 per share, exceeding the Zacks Consensus Estimate of $2 per share, and showing a slight increase from $2.06 per share a year ago, resulting in an earnings surprise of +3.50% [1] - The company achieved revenues of $865.4 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.96% and increasing from $807.2 million year-over-year [2] - Over the last four quarters, Idex has consistently surpassed consensus EPS estimates and topped revenue estimates three times [2] Future Outlook - The sustainability of Idex's stock price movement will largely depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $2.20 on revenues of $872.66 million, and for the current fiscal year, it is $8.24 on revenues of $3.45 billion [7] - The estimate revisions trend for Idex was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Manufacturing - General Industrial industry, to which Idex belongs, is currently ranked in the top 10% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - In Q2 2025, IDEXX's revenue came in toward the midpoint of guidance, with organic sales increasing by 1% year over year, while orders grew organically by 2% [27][28] - Adjusted gross margin declined by 10 basis points year over year, primarily due to dilution from the Mod acquisition and unfavorable mix [29] - Free cash flow increased by 25% year over year to $147 million, representing 94% conversion versus adjusted net income [30] Business Line Data and Key Metrics Changes - In the HST segment, organic orders increased by 2% and organic sales increased by 4%, supported by positive pricing and volume increases in pharmaceutical and defense businesses [31] - In the FMT segment, organic orders increased by 7%, but organic sales declined by 2%, with growth in downstream energy and agriculture offset by declines in chemicals and semiconductor [32] - In the FST segment, organic sales grew by 2%, but organic orders declined by 7%, attributed to choppy order patterns [34] Market Data and Key Metrics Changes - Demand remained healthy in food, pharma, space, and defense applications, while weaker areas included chemicals, automotive, and semiconductor lithography [11] - The company experienced dynamic daily demand levels influenced by trade policy announcements, leading to a modest order recovery in July [12] Company Strategy and Development Direction - IDEXX aims to extend growth potential through variable levels of integration to win in advantaged markets, focusing on cross-business collaboration and operational improvements [14][18] - The company is actively pursuing tuck-in acquisitions to scale and expand critical capabilities in advantaged markets, with a focus on maintaining a strong balance sheet and cash flow generation [38][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the quality of its businesses despite lowering back half financial projections due to slower decision-making and order patterns [13][41] - The company anticipates a stable baseline for orders moving forward, with a focus on leveraging operational capabilities to drive growth [50][51] Other Important Information - IDEXX updated its full-year organic sales growth guidance to approximately 1%, down from 1% to 3%, and adjusted adjusted EPS guidance to $7.85 to $7.95 [36] - The company expects to fully mitigate tariff-related inflation with price increases and additional sourcing and supply chain savings [37] Q&A Session All Questions and Answers Question: Can you talk about the delayed orders on the semiconductor side and your confidence in those projects coming through? - Management noted that while there was oscillation in order patterns, they saw order recovery in July and expressed confidence in the stability of the baseline moving forward [48][50] Question: How much of the guidance cut is attributed specifically to Mott? - The guidance cut is primarily attributed to the MSS group and Mott, with frozen decision-making impacting revenue and profitability flow-through [93] Question: What is the current state of the life sciences segment? - The life sciences segment is experiencing a slow recovery, growing low single digits, with some areas weaker but generally offset by stronger applications in pharma drug discovery [98]

Financial Data and Key Metrics Changes - In Q2 2025, IDEXX's revenue came in toward the midpoint of guidance, with organic sales increasing by 1% year over year [27][30] - Adjusted EBITDA margin declined by 40 basis points to 27.4%, reflecting gross margin performance and lower variable compensation expenses [28] - Free cash flow increased by 25% year over year to $147 million, representing 94% conversion versus adjusted net income [29] Business Line Data and Key Metrics Changes - In the Health and Science Technology (HST) segment, organic orders increased by 2% and organic sales increased by 4%, driven by positive pricing and volume increases in pharmaceuticals and data centers [30] - In the Fluid Management Technologies (FMT) segment, organic orders increased by 7%, but organic sales declined by 2% due to challenging prior year comparisons [31] - In the Fire and Safety Technologies (FST) segment, organic sales grew by 2%, but organic orders declined by 7% due to choppy order patterns [32] Market Data and Key Metrics Changes - Demand remained healthy in food and pharma applications, space and defense, and data center thermal management, while weaker areas included chemicals, automotive, and semiconductor lithography [10][11] - The company experienced a modest order recovery in July after a dynamic demand pattern in Q2, influenced by trade policy announcements [11][12] Company Strategy and Development Direction - IDEXX aims to extend growth potential through variable levels of integration to win in advantaged markets, focusing on cross-business collaboration and operational improvements [13][20] - The company is actively pursuing tuck-in acquisitions to scale and expand critical capabilities in advantaged markets, with a focus on maintaining a strong balance sheet and robust cash flow generation [37][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the quality of its businesses despite lowering back half financial projections due to slower decision-making and tariff-related uncertainties [12][34] - The company anticipates a stable baseline for orders moving forward, with a focus on leveraging operational capabilities to drive growth [50][76] Other Important Information - The company has updated its full-year organic sales growth guidance to approximately 1%, down from 1% to 3% previously, and adjusted adjusted EPS guidance to $7.85 to $7.95 [34] - IDEXX expects to fully mitigate tariff-related inflation through price increases and additional sourcing and supply chain savings [36] Q&A Session Summary Question: Can you discuss the delayed orders on the semiconductor side and the confidence in future orders? - Management noted that while there was oscillation in order patterns, July showed a recovery in both small and larger orders, providing confidence in future order fulfillment [46][48] Question: How much of the guidance cut is attributed specifically to Mott? - The guidance cut is primarily due to the MSS group and Mott, with frozen decision-making impacting revenue and profitability flow-through [92][93] Question: What is the current state of the life sciences segment? - The life sciences segment is experiencing a slow recovery, growing in low single digits, with some areas offsetting weaker segments [97] Question: Can you provide more detail on water performance in Q2? - Water performance was impacted by timing dynamics similar to other segments, but the business is expected to perform well going forward [104] Question: What is the strategic fit of the Microlam acquisition? - Microlam complements IDEXX's optical technologies business by providing precision optics, enhancing capabilities within the MSS platform [107][110]

Q2 2025 Financial Performance - Organic sales grew by 1%[20] - Adjusted EBITDA margin decreased by 40 bps[20] - Free cash flow increased by 25%[20] - Organic orders increased by 2% year-over-year[20] Segment Performance - Health & Science Technologies (HST) organic sales grew by 4%[23], with orders up by 2%[23] - Fluid & Metering Technologies (FMT) organic sales decreased by 2%[29], but orders increased by 7%[29] - Fire & Safety/Diversified Products (FSDP) organic sales grew by 2%[34], but orders decreased by 7%[34] 2025 Guidance - The company expects approximately 1% organic revenue growth for the full year[39] - The company expects 2%-3% organic revenue growth for the third quarter[39] - Adjusted EBITDA is projected to be between 265% and 270% for the full year[39] - Adjusted earnings per share are estimated to be between $785 and $795 for the full year[39]

[Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) The company reported record Q2 sales but revised its full-year guidance downwards due to a more cautious customer outlook [Highlights & CEO Commentary](index=1&type=section&id=Highlights%20%26%20CEO%20Commentary) IDEX reported strong Q2 execution with record sales, but a cautious customer outlook prompted a reset of its 2025 financial assumptions Q2 2025 Key Metrics | Metric | Value | Change vs. Prior Year | | :--- | :--- | :--- | | **Sales** | $865 million | +7% reported, +1% organic | | **Orders** | $830 million | +7% reported, +2% organic | | **Reported Diluted EPS** | $1.74 | -6% | | **Adjusted Diluted EPS** | $2.07 | Flat | - CEO Eric D. Ashleman highlighted **strong execution** but acknowledged a challenging operating environment and a downshift in order trends for rapid-turn businesses exiting the quarter[2](index=2&type=chunk)[3](index=3&type=chunk) - Due to a more cautious customer stance on larger orders, which delayed expected second-half acceleration, the company is **resetting its baseline financial assumptions** for the rest of 2025[3](index=3&type=chunk) [Financial Guidance (Q3 & Full Year 2025)](index=1&type=section&id=Financial%20Guidance%20(Q3%20%26%20Full%20Year%202025)) The company revised its full-year 2025 guidance downwards, now anticipating approximately 1% organic sales growth Revised 2025 Financial Guidance | Period | Metric | New Guidance | Previous Guidance | | :--- | :--- | :--- | :--- | | **Full Year 2025** | GAAP Diluted EPS | $6.30 - $6.44 | $6.56 - $6.95 | | **Full Year 2025** | Adjusted Diluted EPS | $7.85 - $7.95 | $8.10 - $8.45 | | **Q3 2025** | GAAP Diluted EPS | $1.54 - $1.61 | N/A | | **Q3 2025** | Adjusted Diluted EPS | $1.90 - $1.95 | N/A | - The updated full-year guidance is based on an expected **organic sales growth of approximately 1%**[4](index=4&type=chunk) - The third-quarter guidance is based on an expected **organic sales growth of 2% to 3%**[4](index=4&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) Q2 2025 saw record net sales driven by an acquisition, but GAAP net income and EPS declined while operating cash flow increased Consolidated Financial Results (Three Months Ended June 30) | Metric (in millions, except EPS) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $865.4 | $807.2 | +7% | | **Organic Sales Growth** | - | - | +1% | | **Gross Margin** | 45.3% | 45.4% | (10) bps | | **Net Income (GAAP)** | $131.6 | $141.3 | (6.9%) | | **Diluted EPS (GAAP)** | $1.74 | $1.86 | (6.5%) | | **Adjusted Net Income** | $156.5 | $156.1 | +0.3% | | **Adjusted Diluted EPS** | $2.07 | $2.06 | +0.5% | | **Adjusted EBITDA** | $237.2 | $224.2 | +5.8% | | **Cash Flow from Operations** | $161.7 | $133.6 | +21.0% | - Net sales growth was largely due to the **Mott acquisition**, with organic growth driven by positive pricing and initiatives in HST and FSDP segments, partially offset by lower volumes in the FMT segment[7](index=7&type=chunk) - The decrease in GAAP Diluted EPS was influenced by higher amortization from the Mott acquisition, higher interest expense, and a **higher effective tax rate** compared to the prior year[7](index=7&type=chunk) - Operating cash flow and free cash flow increased due to higher operating results and **favorable working capital**, mainly from the timing of collections[8](index=8&type=chunk) [Segment Financial Results](index=3&type=section&id=Segment%20Financial%20Results) The HST and FSDP segments reported sales growth, driven by acquisitions and pricing, while the FMT segment saw a sales decline Segment Performance (Three Months Ended June 30, 2025) | Segment | Net Sales (M) | Reported Sales Change | Organic Sales Change | Adjusted EBITDA (M) | Adjusted EBITDA Margin | | :--- | :--- | :--- | :--- | :--- | :--- | | **Health & Science Technologies** | $365.3 | +20% | +4% | $95.0 | 26.0% | | **Fluid & Metering Technologies** | $310.9 | (3%) | (2%) | $108.7 | 35.0% | | **Fire & Safety/Diversified Products** | $191.5 | +3% | +2% | $56.4 | 29.4% | [Health & Science Technologies (HST)](index=3&type=section&id=Health%20%26%20Science%20Technologies%20(HST)) The HST segment's sales growth was primarily driven by the Mott acquisition, though its adjusted EBITDA margin contracted - Organic sales increased 4% due to positive pricing, growth initiatives, and **strong volumes in aerospace/defense and pharmaceutical businesses**[10](index=10&type=chunk) - Growth was partially offset by **lower volumes in the semiconductor, automotive, and industrial businesses**[10](index=10&type=chunk) - **Adjusted EBITDA margin decreased to 26.0%** primarily due to the impact of the Mott acquisition and unfavorable mix[10](index=10&type=chunk) [Fluid & Metering Technologies (FMT)](index=4&type=section&id=Fluid%20%26%20Metering%20Technologies%20(FMT)) The FMT segment experienced a sales decline due to lower volumes in key end markets, but its adjusted EBITDA margin improved - Organic sales decreased 2% due to **lower volumes in chemical, water, energy, agriculture, and semiconductor businesses**[15](index=15&type=chunk) - **Adjusted EBITDA margin increased to 35.0%** due to positive price/cost and net productivity improvements that outweighed volume deleverage[15](index=15&type=chunk) [Fire & Safety/Diversified Products (FSDP)](index=4&type=section&id=Fire%20%26%20Safety%2FDiversified%20Products%20(FSDP)) The FSDP segment achieved modest sales growth and a slight margin increase, driven by positive pricing and strong OEM demand - Organic sales increased 2% due to **positive pricing and strong North America Fire OEM demand**[15](index=15&type=chunk) - Growth was partially offset by lower volumes related to the **timing of Dispensing projects in emerging markets**[15](index=15&type=chunk) - **Adjusted EBITDA margin increased to 29.4%** as positive price/cost more than offset unfavorable productivity, mix, and volume deleverage[15](index=15&type=chunk) [Corporate Costs & Other Items](index=4&type=section&id=Corporate%20Costs%20%26%20Other%20Items) Corporate costs increased due to higher compensation, while the company actively allocated capital to share repurchases and an acquisition - Corporate costs included in consolidated Adjusted EBITDA were **$22.9 million**, an increase of $1.4 million from the prior year, primarily due to higher employee-related variable compensation[12](index=12&type=chunk) - Key capital allocation activities in Q2 2025 and shortly after include repurchasing **$50.0 million** of shares, repaying a **$100.0 million** senior note, and acquiring Micro-LAM, Inc. for **$90.0 million**[15](index=15&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents the condensed consolidated statements of income, balance sheets, and cash flows for the reporting period [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net sales increased in Q2 2025, but higher costs led to a decline in net income and diluted EPS compared to the prior year Q2 Income Statement Highlights (in millions) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net sales | $865.4 | $807.2 | | Gross profit | $392.2 | $366.8 | | Operating income | $187.9 | $182.7 | | Net income attributable to IDEX | $131.6 | $141.3 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and shareholders' equity increased as of June 30, 2025, while total liabilities decreased from year-end 2024 Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,616.5 | $1,592.7 | | Goodwill | $3,368.6 | $3,251.7 | | **Total assets** | **$6,876.1** | **$6,745.3** | | Total current liabilities | $529.8 | $629.7 | | Long-term borrowings – net | $1,847.1 | $1,859.5 | | **Total liabilities** | **$2,865.7** | **$2,951.2** | | **Total shareholders' equity** | **$4,011.6** | **$3,794.7** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased for the six-month period, while financing activities used significant cash for debt repayment and shareholder returns Six-Month Cash Flow Summary (in millions) | Activity | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $267.4 | $290.2 | | Net cash (used in) provided by investing activities | $(24.5) | $11.7 | | Net cash used in financing activities | $(349.2) | $(118.2) | | **Net (decrease) increase in cash** | **$(68.9)** | **$166.4** | [Non-GAAP Measures & Guidance Reconciliation](index=11&type=section&id=Non-GAAP%20Measures%20%26%20Guidance%20Reconciliation) This section explains the company's use of non-GAAP metrics and provides detailed reconciliations to their GAAP equivalents [Explanation of Non-GAAP Measures](index=11&type=section&id=Explanation%20of%20Non-GAAP%20Measures) IDEX utilizes non-GAAP metrics like organic sales and adjusted EPS to provide deeper insight into its core operational performance - The company uses non-GAAP metrics to provide **greater insight, transparency, and a more comprehensive understanding** of financial information used by management[30](index=30&type=chunk) - Key non-GAAP metrics include: **Organic orders/sales, Adjusted gross profit/margin, Adjusted net income, Adjusted diluted EPS, Consolidated Adjusted EBITDA, and Free cash flow**[31](index=31&type=chunk) [Reconciliations of GAAP to Non-GAAP Results](index=12&type=section&id=Reconciliations%20of%20GAAP%20to%20Non-GAAP%20Results) This section provides detailed reconciliations of reported GAAP results to adjusted non-GAAP figures for key financial metrics - For Q2 2025, reported net sales growth of 7% was reconciled to **1% organic growth** after accounting for a 5% impact from acquisitions/divestitures and a 1% impact from foreign currency[34](index=34&type=chunk) - Q2 2025 reported diluted EPS of $1.74 was adjusted for acquisition-related intangible amortization (+$0.42) and other items to reach an **adjusted diluted EPS of $2.07**[35](index=35&type=chunk) - Q2 2025 reported net income of $131.1 million was reconciled to **Adjusted EBITDA of $237.2 million** by adding back taxes, interest, D&A, and other adjustments[36](index=36&type=chunk) [Reconciliations of 2025 Financial Guidance](index=15&type=section&id=Reconciliations%20of%202025%20Financial%20Guidance) The company provides a bridge from its estimated GAAP EPS and sales growth to its non-GAAP guidance for Q3 and full-year 2025 Full Year 2025 EPS Guidance Reconciliation | Item | Low End | High End | | :--- | :--- | :--- | | **Estimated GAAP Diluted EPS** | **$6.30** | **$6.44** | | Restructuring expenses | $0.33 | $0.28 | | Acquisition-related intangible asset amortization | $1.69 | $1.69 | | Tax impacts | $(0.47) | $(0.46) | | **Estimated Adjusted Diluted EPS** | **$7.85** | **$7.95** | - The full-year 2025 estimated change in net sales of 5-6% is reconciled to an estimated **1% organic sales growth** after accounting for impacts from acquisitions (3%) and foreign currency (1%)[38](index=38&type=chunk)

Core Viewpoint - IDEX Corporation (IEX) is expected to report second-quarter 2025 results on July 30, with a consensus estimate for revenues at $857.2 million, reflecting a 6.2% year-over-year increase, while adjusted earnings are projected at $2.00 per share, indicating a 2.9% decline from the previous year [1][2][10] Group 1: Revenue and Earnings Estimates - The consensus estimate for revenues is $857.2 million, which is a 6.2% increase from the prior-year quarter [2] - The adjusted earnings estimate is $2.00 per share, showing a 2.9% decline compared to the same quarter last year [2] Group 2: Segment Performance - The Health & Science Technologies (HST) segment is anticipated to generate revenues of $356 million, marking a 17.1% year-over-year increase due to strong momentum in energy transition and analytical instrumentation [3] - The Fire & Safety/Diversified Products (FSDP) segment is expected to report revenues of $188.4 million, up 1.6% year over year, driven by strong demand in OEM and integrated solutions [4] - The Fluid & Metering Technologies (FMT) segment is projected to see revenues of $312.2 million, reflecting a 2.2% decline year over year, primarily due to softness in the chemical and agriculture markets [5] Group 3: Recent Acquisitions - The acquisition of Mott Corp. in September 2024 and STC Material Solutions in December 2023 has expanded IDEX's capabilities in applied materials science technology, likely enhancing performance in high-value end markets [6][10] Group 4: Earnings Prediction - IDEX has an Earnings ESP of +0.25%, with the Most Accurate Estimate at $2.01 per share, suggesting a potential earnings beat [9] - The company currently holds a Zacks Rank of 2, indicating a favorable outlook for earnings performance [9]

Financial Data and Key Metrics Changes - Revenue for the company grew by 19.2% year-on-year, increasing from INR 154.5 crore in Q1 FY '25 to INR 184.2 crore in Q1 FY '26 [20] - FAT increased by 25.2%, rising from INR 96.4 crore in Q1 FY '25 to INR 120.7 crore in Q1 FY '26 [20] - Electricity trading volume recorded a growth of 15% year-on-year, reaching 32.4 billion units [19] Business Line Data and Key Metrics Changes - Nearly 53 lakh renewable energy certificates were traded, marking a growth of nearly 150% over the same quarter last year [21] - RTM volumes increased by 41% year-on-year, reaching nearly 13 billion units, highlighting its critical role in managing short-term requirements [21] - Green market volume rose by 51% year-on-year to 2.7 billion units, supporting the integration of clean energy sources [22] Market Data and Key Metrics Changes - India's power consumption in Q1 FY '26 was 446 billion units, a decrease of 1.3% compared to Q1 FY '25 [10] - Average day-ahead market price was INR 4.41 per unit, down 16% year-on-year, while the real-time market price averaged INR 3.91 per unit, a 20% drop [22] - Imported coal prices remained steady at around USD 50 per tonne, lower by 9% compared to the same period last year [10] Company Strategy and Development Direction - The company is focused on maintaining its leadership position in the day-ahead and RTM markets, leveraging robust technology and customer engagement [33][34] - The introduction of electricity derivatives and market coupling is expected to enhance market participation and volumes [18][19] - The company is actively working on diversification initiatives and adapting to regulatory changes to ensure continued growth [25][27] Management Comments on Operating Environment and Future Outlook - The management highlighted India's macroeconomic stability and growth potential, with a GDP forecast of 6.5% for FY '26 [8] - Despite lower than expected power demand due to weather conditions, the long-term outlook for power demand growth remains positive at 6% per annum [11] - The management expressed confidence in maintaining market share and customer loyalty even after market coupling implementation [37][38] Other Important Information - The company is awaiting regulatory approval for extending the Term Air market contract and has completed public comments on the Green segment petition [23] - The Ministry of Power has finalized funding mechanisms for battery energy storage solutions, indicating a shift towards renewable energy integration [12][27] Q&A Session Summary Question: What advantages does IEX have over competitors in the diamond RCM segment? - IEX has maintained a leadership position due to robust technology, customer engagement, and advisory roles with state regulatory commissions [33][34] Question: What percentage of volumes does CTC India contribute to IEX? - CTC India contributes approximately 12% of the volumes on the IEX platform [40] Question: Will competition use transaction fees to gain market share post-market coupling? - The management indicated that they will address any competitive pricing strategies as they arise, emphasizing the small impact of transaction fees on overall power procurement costs [44][45] Question: Is there any mention of MBED in the recent market coupling order? - There is no mention of MBED in the order, and the management expressed uncertainty about its future implementation [60][61] Question: What explains the sharp increase in gas volume in the quarter? - The increase in gas volume was attributed to significant demand from global marketing companies and favorable pricing conditions [116] Question: What are the key advantages needed to sustain a market share above 50%? - The management is focused on retaining current market share and is working on strategies to maintain leadership in the market [102]

Financial Data and Key Metrics Changes - Revenue for the company grew by 19.2% year-on-year, increasing from INR 154.5 crore in Q1 FY '25 to INR 184.2 crore in Q1 FY '26 [19] - FAT increased by 25.2%, rising from INR 96.4 crore in Q1 FY '25 to INR 120.7 crore in Q1 FY '26 [19] - Electricity trading volume recorded a growth of 15% year-on-year, reaching 32.4 billion units [18] Business Line Data and Key Metrics Changes - Nearly 5.3 million renewable energy certificates were traded, marking a growth of nearly 150% over the same quarter last year [20] - RTM volumes increased by 41% year-on-year, reaching nearly 13 billion units, highlighting its critical role in managing short-term requirements [20] - Green market volume rose by 51% year-on-year to 2.7 billion units, supporting the integration of clean energy sources [21] Market Data and Key Metrics Changes - India's power consumption in Q1 FY '26 was 446 billion units, down by 1.3% compared to Q1 FY '25 [8] - The average day-ahead market price was INR 4.41 per unit, down 16% year-on-year, while the real-time market price averaged INR 3.91 per unit, a 20% drop [21] - Supply liquidity in the day-ahead market increased by 45.2% year-on-year [21] Company Strategy and Development Direction - The company is focusing on maintaining its leadership position in the day-ahead and RTM markets, leveraging robust technology and customer engagement [30][32] - The introduction of electricity derivatives and market coupling is expected to deepen India's power market and enhance liquidity [16][27] - The company is actively working on regulatory updates and policy initiatives to support power market development [12][14] Management Comments on Operating Environment and Future Outlook - The management highlighted India's macroeconomic stability and growth potential, with a GDP growth forecast of 6.5% for FY '26 [6] - Despite lower than expected power demand due to early monsoons, the long-term outlook for power demand growth remains positive, projected at 6% per annum until 2032 [9] - The management expressed confidence in maintaining market share and customer loyalty even after the implementation of market coupling [34][70] Other Important Information - The company is awaiting approval from the CRC for extending the Term Air market contract from three months to eleven months [22] - The Ministry of Power has finalized two tranches of viability gap funding for battery energy storage solutions, indicating a push towards renewable energy integration [10] - The company is also involved in developing an Extended Producer Responsibility trading platform and is awaiting further directives regarding coal exchange legislation [26][27] Q&A Session Summary Question: What advantages does IEX have over competitors in the market coupling context? - IEX has maintained a leadership position due to robust technology, customer engagement, and advisory roles with regulatory commissions, resulting in over 95% market share [30][32] Question: What percentage of volumes does CTC India contribute to IEX? - CTC India contributes approximately 12% of the volumes on the IEX platform, but cannot trade on IEX due to holding more than 5% equity in a competing exchange [35] Question: Will transaction fees be a tool for competition post-market coupling? - The management indicated that transaction fees are a small component of total power procurement costs, and they will address any competitive pricing strategies as they arise [38] Question: What is the timeline for implementing market coupling? - The management expressed uncertainty about the January 2026 timeline for market coupling implementation, citing the need for common software and regulatory frameworks [40][41] Question: Is there any mention of MBED in the recent market coupling order? - There was no mention of MBED in the order, and the management could not comment on its future implementation [46] Question: What are the options available post-CRC order? - The company has several options, including seeking a review from CRC or appealing to APTEL, and is currently evaluating the order [102]

IEX Performance and Market Position - IEX's electricity volume in Q1 FY26 reached 32.4 Billion Units (BU), a 15% increase, while FY25 saw 121 BU, an 18.7% increase, and FY24 had 101.7 BU, a 12.3% increase[30] - Renewable Energy Certificates (RECs) traded on IEX in Q1 FY26 amounted to 53 Lakh, a 150% increase, and FY25 saw 178 Lakh, a 136% increase[30] - Collectives (DAM, RTM, G-DAM) constitute approximately 75% of IEX's total volumes[33] - Total Revenue for Q1 FY26 was ₹120.2 Cr, with EBITDA at ₹164.4 Cr and PAT at ₹117.1 Cr[70] - IEX is India's first carbon-neutral power exchange since FY22[73] Energy Sector Transition and Growth Drivers - India has achieved 50% share of non-fossil fuel in installed electricity generation capacity 5 years ahead of the 2030 target[17] - Thermal energy generates 72% of India's electricity, while renewables contribute 25%[14] - IEX expects significant volume growth based on business as usual, with further growth anticipated from additional levers[41] - By FY30, India's power demand is forecasted to reach approximately 2,300 BU[41] - The Ministry of Coal (MoC) aims to produce 1.3 billion tonnes of domestic coal by FY26 and 1.5 billion tonnes by FY30[58] Indian Gas Exchange (IGX) Performance - IGX has over 45 registered members and over 200 registered clients[78] - IGX yearly volumes in FY25 reached 60 Million MMBTU, while Q1 FY26 saw 24.6 Million MMBTU[81] - IGX anticipates its share in overall gas consumption to increase from the current 2% to 4-5% by 2030, reaching approximately 250 Million MMBTU, with a CAGR of approximately 36%[89]