Are you planning to invest in Indian Energy Exchange Limited? Looking for IEX share price analysis and review? If yes, then we got you covered!
Investing in stock markets is a great way to secure your finances and gain good returns. However, this is a comprehensive process that requires careful research and analysis of the company to make sure it is safe to invest in. Indian Energy Exchange Limited (IEX) is no different. While the company is attracting a lot of investors due to its stable financial performance, it is still important to look at its strengths and weaknesses before making any final decision. This article is about the same, here we will discuss the complete company profile, IEX share price, and reasons to invest in it. So, without any further ado, let’s begin!
Indian Energy Exchange Limited – Company Overview
Indian Energy Exchange Ltd is the first power exchange in India. Not just the first, but it is also the largest and most popular Indian exchange with a huge market share of more than 98% of electricity trading volume. Further, it has a participant base of over 6300. The company was regulated and approved by Central Electricity Regulatory Commission (CERC) in 2008 and has been ruling the industry since then.
IEX provides an easy-to-use and automated platform for the delivery of power and electricity. Further, it provides the participants with a great opportunity to buy and sell electricity contracts Energy Saving Certificates(ESCerts), and Renewable Energy Certificates (RECs). It also offers easy and convenient price discovery to the users.
One of the main reasons behind the huge popularity of IEX is the transparency and accessibility of the power market it offers. Besides, it also improves the efficiency and speed of trading.
The reason why IEx attracts a lot of investors is that it is one of the two Indian exchanges that provide an automated platform for trading electricity certificates and products. Over the years, the company has seen a massive surge in demands and is providing reliable services ever since. With a great market share and continuous flow of income, the IEX share is one of the most sought-after shares of the Indian market.
IEX share price analysis – Top reasons to invest in it
To help you make the right decision, here are a few performance metrics on which we will carry our Indian Energy Exchange share price analysis:
P/E (Price to Earnings) ratio
PE ratio is a powerful tool that helps you find out the financial position of a given company or share. This ratio tells how much an investor is willing to invest for a share as per his earnings. As a general rule of thumb, if the shares have a low P/E ratio then they are undervalued, otherwise overvalued.
The P/E ratio of IEX is trading at 74.50, which is comparatively high, and hence, it is overvalued. But for long-term investment, it is an ideal stock to invest in.
The current ratio is used to figure out the ability of the given company to pay its short-term liabilities using its short-term assets. Generally, a higher value of the current ratio is considered to be good. It indicates that the company will sail through the potential bumps and unexpected lows of the economy in near future. IEX is trading at a current ratio of 1.85.
Great for long-term investment
Return on Assets (ROA) is a performance metric that shows the ability of a company to gain a return on its investments. In simple words, ROA helps in determining how efficiently a company can turn its money into net profits. The Indian Energy Exchange Limited has a ROA value of 26.7%, which is a clear indication of its stable future. This means it has a better chance of offering higher returns to its investors.
(ROE) Return on equity
Just like ROA, ROE is an indispensable tool for determining the ability of a company to gain profits from the investments of its shareholders. In general, the ROE value tells how much profit is generated by a shareholder’s investment or equity. The ROE of the Indian Energy Exchange is noted at 47.27%, which is a good sign.
Low Debt to Equity Ratio
The debt to equity ratio gives you a fair idea about the capital structure as well as the financial performance of a company. The debt to equity ratio of IEX is 0, which means the company is paying its debts efficiently.
Consistent sales growth
The recent year sales growth of Indian Energy Exchange Limited is listed at 23.3%, which is great news for the investors.
Offers fair dividend
The dividend yield is another metric that indicates how much money the company will offer you in terms of the price of the stock. Note that, IEX offers a dividend of Rs. 4 and a dividend yield of 0.69%.
So, this is the complete analysis of the IEX share price. We have discussed all the reasons that make IEX a great and low-risk investment for investors. We hope it helps you.