Will market coupling deal a heavy blow to IEX's market share? Rupesh D Sankhe answers
«So, 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,» says Rupesh D Sankhe, Elara Capital.
The market coupling, that is surely going to challenge IEX's market dominance. I mean, it currently holds about that 84% lion's share of the power trading business. Back of the envelope calculations, what is the kind of dent that IEX is likely to see if and when this is going to be put in place?
Rupesh D Sankhe: See, 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 like a Term Ahead Market where market share of IEX is 60%. So, we can expect once market coupling gets implemented, this product will get launched, DAM and RTA and definitely the market share could come down to 60-70% also.
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.
It is certainly negative for IEX in terms of market share loss. And the last two years, if you look at the one-and-a-half-year stock performance, the re-rating has happened because of the volumes traction which we have seen
