Shares of IEX slipped 0.43% to ₹104.75 on Tuesday, but the trade volume reflected the buzz after Bernstein lifted the rating to Market Perform and set a ₹110 target – a 5% upside from the last close.
Bernstein’s move follows a trend of underperformance in the energy‑exchange space; the rating upgrade signals confidence that regulatory momentum will eventually pay off. The target price sits just above the 12‑month average of ₹107, suggesting the market has already priced in most of the expected coupling benefits.
Volume expectations remain cautious: supply, not demand, is slated to curb short‑term growth, with strong power demand, weaker hydro output, and coal shortages keeping trade volumes in check. Yet, Bernstein predicts that power‑exchange volumes will outpace overall demand over the medium to long term, thanks to a government push for market‑based products like virtual PPAs.
Market‑coupling timelines are a sticking point; implementation could slip to FY28 as legal and operational hurdles pile up. Cross‑exchange clearing, software alignment, and Grid India’s limited price‑discovery experience are cited as major roadblocks, and a potential revision of transaction charges looms. However, the regulator is expected to wait for coupling before weighing charges, mitigating near‑term regulatory risk.
Looking ahead, IEX’s valuation is deemed fair under base‑case assumptions of lower transaction fees and the gradual erosion of market share post‑coupling. Still, if coupling proceeds, the stock could rally beyond the ₹110 target, especially if volume growth accelerates in the next fiscal cycle.