Added to YB: 2024-05-20
Pitch date: 2024-05-17
IEX.NS [neutral]
Indian Energy Exchange Limited
-11.94%
current return
Author Info
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Company Info
Indian Energy Exchange Limited provides automated trading platform for physical delivery of electricity, renewable energy, and certificates.
Market Cap
INR 113.0B
Pitch Price
INR 144.30
Price Target
N/A
Dividend
3.15%
EV/EBITDA
14.16
P/E
22.94
EV/Sales
12.73
Sector
Capital Markets
Category
growth
Indian Energy Exchange: Do you want to earn a royalty on India’s economic growth?
IEX.NS (pass): India's premier energy exchange w/ 87% mkt share, effectively a toll on energy consumption. Exchange-traded energy at 7% vs 15-91% in developed markets, strong growth runway as India's consumption rises 6% annually & market deepens. Natural monopoly w/ 82% op margins, 81% ROCE, minimal capex needs. Risk: CERC exploring market coupling regulation modeled on Europe's EEX, could slash fee/MWh 75%+ & ROE from 42% to 13%. Trading 58x 2024E FCF. DCF scenarios yield 5-12% IRR vs 15% hurdle; fair value INR 48-214 vs INR 147.50 current (consensus -33% to +48%). Regulatory uncertainty too high at current valuation; would need 33% discount to INR 95 for 15% IRR under optimistic (no regulation) case. Pass unless confident regulation less severe than European model or terminal growth >4%.
Read full article (19 min)