Neutral IEX; target of Rs 200: Motilal Oswal

Motilal Oswal's research report on IEX

IEX delivered standalone revenue of INR1,392m in 2QFY25 (+28% YoY), in line with our estimate. Reported standalone PAT of INR1,061m came in 3% above our est. of INR1,025m (+28% YoY), mainly led by higher other income. IEX’s overall volumes rose 38% YoY in 2QFY25, with electricity market (DAM, TAM and RTM) volumes rising 15% YoY and renewable (RE) volumes surging 277% YoY. In 2QFY25, electricity demand growth slowed owing to 8% higher-thanaverage monsoon rains, with average power demand at 435BUs, up 0.5% YoY. IEX holds a dominant market position with a 99.5% share in the bilateral day-ahead market (DAM) and real-time market (RTM), and about 40% in the term-ahead market (TAM). Overall, IEX held a combined market share of 79% in 1HFY25.

Outlook

Our TP of INR200 for IEX is based on the following valuation: We value the business at Dec-26E EPS of 5.8 with a PE multiple of 34x. This compares with mean and mean+1 SD of 33x and 44x, respectively.We have not assumed any value for IGX stake in our valuation.