Indian Energy Exchange Ltd has reported 25 per cent year-on-year rise in net profit for the September quarter on a 26 per cent jump in sales. Analysts said the revenue print came in line with expectations, while the bottom line was marginally higher than what they expected. Post Q2 results, they see only a limited upside ahead on the counter, given rich valuations.
Nuvama noted that IEX's profit growth, lagged behind the 38 per cent volume growth, owing to halving of fees in the REC segment to Rs 10 from Rs 20 per unit. Although Q2 saw high volumes on weak power demand and falling spot prices, it finds persistent challenges over next one–two years from rising power deficit/spot price led volumes fleeing spot contracts. It said IEX’s entry into 11M contracts is pending CERC approval, but can also raise liquidity risks. It said ‘market coupling’ murmurs have also picked up again.
"We are baking volume growth of 17 per cent over FY24–26E and 16 per cent over FY24–30E and yet find limited upside; retain ‘REDUCE’ with DCF-based target price of Rs 150 (unchanged), that factors in 16 per cent volume CAGR over FY24–30," it said.
MOFSL has reiterated its 'Neutral' rating on the IEX with a target price of Rs 200. The IEX stock closed at Rs 180.80 on Friday, down 1.87 per cent.
"We value the business at December 2026E EPS of Rs 5.80, with a PE multiple of 34 times. This compares with mean and mean+1 SD of 33 times and 44 times, respectively. We have not assumed any value for IGX stake in our valuation," it said.
Arihant Capital Markets noted IEX is expecting continued strong performance with steady volume growth across markets. The company expects reductions in global LNG prices in the coming years to boost domestic gas consumption and trading volumes.
Strong emphasis is on growth, driven by regulatory support, increasing power demand, and India's continued commitment to expanding renewable energy capacity, Arihant said.
IEX has plans to enter coal exchange, Extended Producer Responsibility (EPR) trading, and said carbon exchange markets are progressing well. These initiatives are contingent on regulatory approval and government directives, it said.