The fall was witnessed after reports of implementation of market coupling for power exchanges either by the end of the current fiscal year or the start of FY26 came out, which is anticipated to hit the market dominance of IEX.
IEX currently commands the majority of the power trading business, with 84% share in it.
“Definitely, the market coupling is negative for IEX because as of now, there are two key products which are there, like Day Ahead Market and RTA where IEX is enjoying close to 97% market share. This product is not still available with a new exchange like HPX. The product which is there is like a Term Ahead Market where market share of IEX is 60%,” said Rupesh D Sankhe of Elara Capital.
Once the market coupling gets implemented, the products (DAM and RTA) will be launched and IEX’s market share could come down to 60-70%.
“Assuming 70% market share for IEX, which is currently at 84%, I think EPS downgrade could be 20% based on FY27 estimates. And assuming 60% kind of market share for IEX, then EPS downgrade could be around 30% for FY27. So, it is certainly negative for IEX in terms of market share loss,” Sankhe added.Sankhe also emphasised on the fact that in the last 2 years, the stock’s re-rating happened because of the volume traction which was seen around 20%. So, certainly a 20-30% re-rating was mainly on the assumption of market coupling issues getting resolved.From the technical view-point, IEX has dropped over 12% in two sessions, reversing a three-month uptrend and erasing three weeks of gains, leaving bulls on the defensive.
“Current indicators suggest a potential further decline towards the Rs 187-192 range, with resistance likely around the Rs 215-220 zone in the event of a rebound,” said Ajit Mishra – SVP, Research at Religare Broking while advising traders to avoid aggressive positions until the stock shows signs of stability.
On the monthly chart, IEX has been forming a rounding pattern and recently moved from Rs 130 to Rs 244 zones in the last 28 weeks. However, it failed to hold its momentum and witnessed some profit booking decline towards its 50 DEMA at Rs 200 zones.
“Now, it (the stock) has to hold Rs 200 zones with support of Rs 188 for an upside swing towards Rs 225-230 zones,” said Chandan Taparia, Senior VP, Equity Derivatives & Technicals, Broking & Distribution at Motilal Oswal.
Additionally, the ROC Momentum indicator has turned up from its bottom which confirms the bullish sentiment for a swing after the profit decline of the last two trading sessions.
Meanwhile, the stock was trading 2.6% higher at Rs 207.70 on BSE around 1:30 pm today.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)