Indian Energy Exchange shares rise over 2% after UBS upgrades stock to ‘buy’

Shares of Indian Energy Exchange (IEX) gained as much as 2.72 percent on Thursday after UBS Securities upgraded its stock to ‘buy’ from ‘sell’. However, UBS has cut the target price on the stock to Rs 210 versus its earlier target price of Rs 227.

In December 2021, UBS had downgraded the stock to ‘sell’ largely on rich valuations. The stock was trading at almost 68 times forward earnings and on concerns of volumes getting normalised at that time.

Now, year-to-date (YTD), the stock is down 37 percent and the valuations have corrected close to 42 times forward earnings.

USB Securities believes, that most of the risks, which have been in the market including competition and losing market share, are all in the price now.

Atta exporters will need government approval hereon

According to UBS Securities, investors will start gaining more confidence as and when the volume sustains even after the launch of the new exchange.

Meanwhile, IEX has registered a 17 percent year-on-year (YoY) growth in trade volume to 8,267 million units (MU) in June. Power trade volume stood at 7,093 MU in the year-ago period, according to the company's statement.