Multibagger Alert: This energy exchange business has quadrupled investor wealth with a return of 301% in the past year!

On a YTD basis, the stock has given a return of 242.89%.

The stock of India’s premier electricity exchange, Indian Energy Exchange (IEX) has given investors stellar returns of 301.72% over the last year. The share price stood at Rs 194.35 on November 6, 2020, and since then, the stock has more than quadrupled investor wealth.

Revenue for the quarter came in at Rs 110.4 crore, up 55.6% YoY and 21.1% QoQ. IEX registered an EBIDTA margin of 86.1% vs 82.2% QoQ, which is the highest ever in the company’s history. Absolute EBIDTA came in at Rs 95 crore as compared to Rs 74.9 crore in the last quarter. The company saw strong volumes in August and September whereas July witnessed a slight dip led by the second wave. PAT came in at Rs 77.4 crore, up 74.6% YoY & 24.6% QoQ.

Indian Energy Exchange Ltd engages in the power exchange business and provides an automated platform for the trading of electricity and related products. It facilitates the exchange of power between the generation (like NTPC, Tata Power, Adani Power) and energy distribution companies. It has a near-monopoly in this business, commanding a market share of 95% in the power exchange market. At present, only two companies are engaged in the business of power exchange - IEX and Power Exchange India Ltd (PXIL).

IEX’s primary revenue sources include transaction fees (about 84% of revenues) and annual subscription fees (5% of revenues). Since the commencement of its business in 2008, the trading volume on its exchange has been increasing at a staggering rate of over 32% CAGR, which has driven the top-line of the company.

Shares of IEX have seen strong traction over the last year due to the green energy theme playing out in the markets, as well as their near-monopoly status (with nearly 95% market share). The addition to the F&O segment in the latest series also came as an important tailwind.

Looking ahead, the company’s prospects remain positive given its clean balance sheet, near monopoly, regulatory tailwinds and introduction of newer products, which is expected to drive strong double-digit volume growth in the medium term.

At 12.20 pm on Tuesday, the stock is trading at Rs 787.55, up by 0.87% or Rs 6.80 per share on BSE. The 52-week high of the scrip is recorded at Rs 956.15 and the 52-week low at Rs 194.80 on the BSE.