Earnings season is rolling in, and this time Indika Energy (INDY) took the spotlight. The results weren’t exactly upbeat, with a net loss of around USD 2 million in 3Q25, mainly due to weaker performance from Kideco as lower coal prices and heavy rainfall hit production in East Kalimantan. Still, our analyst sees encouraging signs beneath the surface.
 

Despite lower prices and volumes, Kideco managed to cut production costs by 15% yoy, helping gross margin inch up to 11.7%. Meanwhile, non-coal businesses like Tripatra, Indika Resources, and Interport delivered solid growth of up to 30% yoy, showing that INDY’s diversification strategy is starting to pay off.
 

Performance is expected to improve in the fourth quarter as weather conditions normalize and production volume recovers. Looking further ahead, our analyst sees the upcoming gold project, set to contribute meaningfully in 2H26, as a key driver of medium-term growth.

Our analyst sees INDY’s current weakness as a temporary setback in a broader transformation journey. BUY maintained, TP IDR 3,300.