'Market coupling a precursor to MBED': IEX share price targets, outlook & more

IEX share price targets: The CERC’s order approving ‘market coupling’ with effect from January 2026E would disrupt the monopoly of Indian Energy Exchange Ltd (IEX) in the DAM market, as it introduced uniform price discovery across exchanges. Brokerages said the level playing field would impact IEX’s moat of price determination. 

Nuvama estimated that IEX’s share in DAM and RTM at around 99 per cent in FY25, and comprising 80–85 per cent of the sales mix, should dip to 70 per cent by FY27 (DAM) and FY28E (RTM). It said a price war-led trading margin cut is likely from 4p/kWh to 3.5p/kWh by FY28E.
Add to that if uniform pricing is extended to RTM and TAM, IEX’s market share could erode further. 

"The next 18–24 months will thus be key, with successful implementation hinging on complex backend technology wherein IEX claims an edge over competitors," Nuvama said.

This brokerge sees ‘coupling’ as a precursor to MBED, which could raise exchange-traded energy from 8 per cent of generation in FY25 to 20 per cent by FY33E. However, the near-term visibility remains hazy, as Nuvama retained ‘Reduce’ with a DCF-based target price of Rs133 against Rs 173 earlier.

While stock valuation has corrected sharply, overall the energy exchange space remains in a flux as the implementation of market coupling for DAM and other segments unfolds in the next few quarters, and this drives MOFSL's cautious view on the space

"We continue to like IEX for its competitive technological platform, robust new product leadership and strong management. We think near-term stock performance is likely to remain under pressure as competitive dynamics (fight for market share, re-defining of transaction fee) unfold in the sector," it said.

For MOFSL, key areas to monitor in the coming months include any legal recourse initiated by IEX; practical challenges in operationalising market coupling in DAM; whether timeline for market coupling in DAM goes beyond January 2026, and roadmap for market coupling implementation in the RTM segment.

"We value IEX at a 28x FY27E EPS, in line with its long-term average, and reiterate our Neutral rating on the stock with a target price of Rs 135," it said.