Buy Indian Energy Exchange, target price Rs 284: LKP Securities

LKP Securities has buy call on Indian Energy Exchange with a target price of Rs 284. The current market price of Indian Energy Exchange is Rs 242.5. Time period given by analyst is one year when Indian Energy Exchange Ltd. price can reach defined target.

Indian Energy Exchange Ltd., incorporated in the year 2007, is a Mid Cap company (having a market cap of Rs 21927.54 Crore) operating in Financial Services sector.

Indian Energy Exchange Ltd. key Products/Revenue Segments include Sale of services and Other Operating Revenue for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 130.78 Crore, up 6.93 % from last quarter Total Income of Rs 122.30 Crore and up 36.09 % from last year same quarter Total Income of Rs 96.09 Crore. Company reported net profit after tax of Rs 80.73 Crore in latest quarter.

Investment Rationale
IEX has been a pioneer of power trading in India and with the transformational journey the Indian power market is headed towards ‘One Nation, One Grid and One Price’. The brokerage believes IEX will be a key player in this journey. The volumes on the platform have been on the rise over the last many quarters with new product addition and shift of volumes from traditional modes of transaction. Going forward, it believes the launch of MBED will be a key milestone in the company’s history which will witness a significant volume flow and rise in the share of spot market in the country’s overall power market.The return profile of the company has been outstanding over the years led by high margins and better operating leverage. Acceleration in ROE/ROCE from next fiscal once MBED is launched should in view provide the growth momentum. It maintains a BUY with a target price of ₹284.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of Dec 30, 2020, while FIIs held 30 per cent, DIIs 36.6 per cent and public and others 33.4 per cent.