The company has been in the news off late after it challenged the Central Electricity Regulatory Commission’s (CERC) July 2025 order on market coupling before the Appellate Tribunal for Electricity (APTEL). Market coupling is a structural reform that could potentially alter how electricity prices are discovered across power exchanges. The market sees this move as diluting the company’s dominance in price discovery, liquidity, and trading volumes.
What should investors do?
At the hearing held last week, discussions were centred on the process adopted by the regulator rather than on the concept of market coupling itself. While market coupling is still likely to be implemented over time, its timeline remains uncertain given the complexity of execution, the high likelihood of a fresh formulation process and the potential for further litigation.
In this context, JM Financial maintained its Add rating on the stock, valuing it at 30x FY28 EPS to arrive at a base-case target price of Rs 158. That translates to an upside potential of 14.5% from current market levels. Separately, CERC submitted an affidavit stating that it is not withdrawing its order on market coupling, suggesting that the regulatory process remains active but far from conclusive, the brokerage added.
On the other hand, Bernstein reiterated an ‘Underperform’ rating on IEX and set a target price of Rs 115, saying regulatory risks, rather than operating performance, will be the decisive factor for the stock. The brokerage said three issues matter most for IEX: market coupling, transaction charges and trading volumes. While recent legal signals could provide near-term relief, Bernstein warned that structural risks to earnings remain.
“Market coupling – IEX presented a strong case in the last APTEL hearing, and we see reasonable odds of APTEL asking for a re-evaluation of the timing of market coupling – which could be a temporary positive,” Bernstein said. However, the brokerage cautioned that any delay in coupling could reopen a more damaging debate. “If coupling gets pushed out, we see high chances of a discussion paper on transaction charges proposing a reduction in basis benchmarks and industry ROE norms. This is the biggest reason for our underperform rating.”Last week, the company released its business update for the third quarter of FY26. Indian Energy Exchange recorded electricity traded volumes of 34.08 billion units, excluding TRAS, in Q3 FY26, reflecting a year-on-year growth of 11.9%.
During the quarter, improved supply from hydro and wind sources, along with steady coal-based generation, enhanced supply liquidity on the exchange platform, contributing to lower power prices across key market segments.
The Market Clearing Price in the Day-Ahead Market averaged Rs 3.22 per unit in Q3 FY26, a decline of 13.2% from the same quarter last year. The Real-Time Market Clearing Price stood at Rs 3.26 per unit, down 11.6% year-on-year.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)