IEX

: Structurally Strong Despite Regulatory Overhang

remains a case where near-term regulatory uncertainty masks a structurally improving business. Concerns around market coupling weigh on sentiment, but strong volume momentum, diversification into new energy segments, and expanding participation across power markets enhance earnings visibility. With valuations meaningfully corrected, IEX offers a favourable risk-reward profile for long-term investors. Operational Performance Q4FY26 volumes: record 39.4 BU, up 24.3% YoY. Real-time markets (RTM): surged 48.2% YoY. Green market volumes: up 26.5% YoY. REC trading: record 71.7 lakh units. March 2026 volumes: all-time high of 13.9 BU, up 23.5% YoY. Transaction-fee-driven model ensures earnings visibility, with higher volumes offsetting marginal realisation declines. Strategic Initiatives Coal exchange: in-principle approval received; entry into a large, unorganised market aligns with regulatory push for transparency. Carbon markets: subsidiary rebranded as ICX Private Ltd, sharpening focus on emissions trading and sustainability-linked instruments. Gas exchange (IGX): scaling rapidly, supported by India’s push to raise natural gas share in the energy mix. IGX posted 48% PAT growth (9MFY26); potential IPO of ₹600–700 crore could unlock significant value. Valuation & Outlook Stock trades at ~22x one-year forward earnings, down from 45–50x earlier, largely pricing in market-coupling risks. Asset-light model, strong return ratios, and cash generation underpin resilience. Summer season demand expected to sustain volume growth, supporting earnings momentum. Conclusion Despite regulatory overhang, IEX is transitioning into a diversified energy exchange platform, with coal, carbon, and gas exchanges adding new growth levers. With volumes at record highs and valuations corrected, the company offers a compelling blend of structural growth, earnings visibility, and value-unlocking catalysts