Shares of Indian Energy Exchange (IEX) experienced a 4% decline in Friday's trading session after the company announced its September quarter results. The Q2 performance, while largely in line with expectations, has led to a divergence in analyst recommendations regarding the stock's future trajectory.
IEX Q2 Performance Overview
IEX reported a 9% year-on-year increase in revenue for the September quarter, driven by a 13% rise in total traded volumes. This revenue figure slightly exceeded JM Financial's estimate but fell 1% below the consensus forecast. The company's Profit After Tax (PAT) grew by 9.23% to Rs 132.83 crore for the quarter. Average Market Clearing Prices (MCP) in the Day-Ahead Market (DAM) and Real-Time Market (RTM) saw significant increases, reaching Rs 5.7 and Rs 5.2 per unit respectively, marking a 46% and 49% year-on-year rise.
Analyst Ratings and Price Targets
Following the results, several brokerage firms updated their outlook for IEX shares:
- JM Financial: Maintained an 'Add' rating with a target price of Rs 117, based on 18x September 2028 PE.
- Axis Capital: Also issued an 'Add' rating, setting a higher target price of Rs 135.
- Ambit Capital: Issued a 'Sell' call with a target price of Rs 100. This target suggests limited downside from Friday's low of Rs 101.30.
Sustained Power Demand Fuels Growth
IEX highlighted that India experienced sustained power demand throughout the first half of the fiscal year, supported by robust industrial activity and increased irrigation demand amidst a weaker monsoon. Total power demand grew 10.2% year-on-year to 897 Billion Units (BUs) in H1 FY27. In Q2 alone, elevated temperatures due to El Niño and deficient monsoon rainfall contributed to a record 11.5% year-on-year growth, pushing electricity demand to 502 BUs.
This surge in demand directly influenced the higher average market clearing prices observed during the quarter, reflecting the strong underlying dynamics of the Indian power sector.