Indian Energy Exchange (IEX) is the leading electricity exchange in India, which facilitates electricity trading. NS multibagger stock It has grown by over 135% in the last six months, while it has given a return of over 260% so far in 2021 (Year-to-date). From ₹This year January has rallied to trade at 220 each share ₹Currently 795.
IEX has about 95% market share in the power exchange market. The company has a debt free balance sheet with almost cash and investments ₹700 crore, ICICI Securities said in a note.
“Over the past year, IEX has been largely valued given its clean balance sheet, near monopoly, regulatory tailwind and introduction of new products, which will drive strong double-digit volume growth over the medium term. We will remain positive and maintain our buy rating on the stock,” said the brokerage. Its target price is ₹910 per share.
ICICI Securities is bullish on the stock due to rising power demand and government policies. “With the Supreme Court settling the dispute between the Central Electricity Regulatory Commission (CERC) and SEBI, electricity can now be traded in the form of futures contracts and other commodities along with derivatives on exchanges,” the note said. “
It believes that the settlement will open the door to the introduction of long-term delivery base contracts in power exchanges and that IEX will be a beneficiary. This will not only increase the sales but also new products will be available in the market.
“The change in power purchase pattern in the short term market catalyzed by MBED from Power Purchase Agreements (PPAs) is expected to result in a strong jump in volumes from FY14E onwards. This can provide strong volume growth traction to power exchanges like IEX,” the brokerage said.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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