Medium-term Elliott wave view on Indian Energy Exchange Ltd (IEX) suggests the decline to Rs.150.70 (25th July'22) ended wave 3 of Y downside rally is still in progress with internal subdivision as a double three Elliott wave structure.
We assume that cycle from the 04th of April'22 (Rs.251.5) high is unfolding as 5 wave impulse structure. We expect to see a price to pull back in ((Y)) before rally takes place toward new highs.
Rating: Accumulate, BUY
Buying Range: Above Rs.178
3 & 6 M Price Target: Rs. 255, 270, 320
Potential Upside (%): 43
Stock Data
FV (₹) : 1 Market Cap Full (₹ bn) : 215 Market Cap Free Float (₹ bn) : 183 52-Week High / Low (₹) : 319 / 75 2-Year High / Low (₹) : 319 / 39 1 Year Avg. Dly Traded Volume (in lakh) 79 BSE Code / NSE Symbol 540750 / IEX Bloomberg : IEX IN
Outlook & Valuation 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’. We believe 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, we believe 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 our view provide the growth momentum. We maintain a BUY with a target price of ₹255, 300.
Exhibit 1 EWT:
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