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Check Before You Invest : Indian Energy Exchange Ltd

BSE: 540750 NSE: IEX ISIN: INE022Q01020
  |   Sector:  Power   |   Industry:  Power Generation/Distribution

Snapshot

Q.1 Which industry/sub-sector does Indian Energy Exchange Ltd belong to?
Indian Energy Exchange Ltd belongs to the Power sector, operating specifically within the Power Generation/Distribution segment.
Q.2 Is Indian Energy Exchange Ltd a good quality company?
Indian Energy Exchange Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Indian Energy Exchange Ltd undervalued or overvalued?
Indian Energy Exchange Ltd appears Somewhat Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 23.92 42.52
Price to Book 8.67 16.08
Price to Sales 18.63 31.76
EV to EBITDA 17.27 30.13
Q.4 Is Indian Energy Exchange Ltd a good buy now?
Indian Energy Exchange Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Indian Energy Exchange Ltd?
Indian Energy Exchange Ltd revenue growth is 19.2% for FY-2025, which is above its 5-year CAGR of 15.81%, indicating faster growth.

Q.2 Gross Profit margin of Indian Energy Exchange Ltd?
Indian Energy Exchange Ltd Gross profit margin which is the profit after deduction of direct costs, is 106.7% for FY-2025, which is above its 5-year median of 101.6%, indicating increasing margins.

Q.3 Operating Profit Margin of Indian Energy Exchange Ltd?
Indian Energy Exchange Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 85.01% for FY-2025, which is in line with its 5-year median of 84.29% indicating stable margins.

Q.4 Net Profit Margin of Indian Energy Exchange Ltd?
Indian Energy Exchange Ltd Net Profit Margin is 77.45% for FY-2025, is above its 5-year median of 73.02%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 106.7 101.6
Operating Profit Margin (%) 85.01 84.29
Net Profit Margin (%) 77.45 73.02

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Indian Energy Exchange Ltd?
Indian Energy Exchange Ltd Return on Asset is 21.23%, which is in line with its 5-year historical median of 21.42%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Indian Energy Exchange Ltd?
Indian Energy Exchange Ltd Return on capital employed is 54.04% for FY-2025, which is in line with its 5-year historical median of 54.04%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Indian Energy Exchange Ltd?
Indian Energy Exchange Ltd Return on equity is 41.22% for FY-2025, which is in line with its 5-year historical median of 41.22%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Indian Energy Exchange Ltd?
Indian Energy Exchange Ltd Cash conversion cycle is -14 days, above its 5-year historical median of -1175 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.27 0.28
ROE (%) 41.22 41.22
ROCE (%) 54.04 54.04
Cash Conversion Cycle -14 days -1175 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Indian Energy Exchange Ltd?
Indian Energy Exchange Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.44, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Indian Energy Exchange Ltd?
Indian Energy Exchange Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Indian Energy Exchange Ltd?

Q.1 Promoter shareholding and pledge status of Indian Energy Exchange Ltd?
Promoters hold 0.00% of the Indian Energy Exchange Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Indian Energy Exchange Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Indian Energy Exchange Ltd vs industry peers?
Indian Energy Exchange Ltd revenue CAGR is 15.81%, compared to the industry median CAGR of 0%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 19.2 -
Gross Profit Growth (%) 19.7 -0.1
Operating Profit Growth (%) 20.4 0.1
Net Profit Growth (%) 21.7 -3
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.27 0.12
ROE (%) 41.22 2.44
ROCE (%) 54.04 4.39
Cash Conversion Cycle (days) -14.35 62

Valuation & price assessment

Q.1 Stock return of Indian Energy Exchange Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 0.67% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 0.7% -6.3% -34.2%
Q.2 Valuation ratios of Indian Energy Exchange Ltd vs historical?
The current P/E ratio of 23.92 is lower than its historical median of 42.52, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 23.92 42.52 27.37
Price to Book 8.67 16.08 1.82
Price to Sales 18.63 31.76 6.75
EV to EBITDA 17.27 30.13 13.61

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