They are not a pure infrastructure play. This is evident from their margin profile which is quite contrasting with Netweb. They are compute provider. Their value addition happens one layer above infrastructure. They have productized all this infra to sell. For example, instead of just giving you server where you install your database, E2E will give you easy DB setup without having to think about the hardware level stuff. This is why they can dictate the margin they do.

The reason for the extreme valuation is the cash infusion they are doing to get more fixed assets(computer hardware), and they being focused on high density compute allows them to pack more compute in the same racks. Last concalls Dua said, the Data Center costs them approx 10% of the revenue which is quite low if you think about it.

They had 200cr fixed assets in March 2024. Then additional 400 cr. which is now operational (announced on Twitter). Finally the new 1400 cr. coming in bringing the total assets to 2000cr. (200 + 400 + 1400). They may not invest all the cash on computer hardware, so this 2000 cr is the upper limit. They will realize the money from L&T deal by 31st Dec, 2024 and take a quarter to acquire and install everything. If we take it to be true, that means from Q1 FY26, they can have up to 2000 cr assets vs 200cr in March 24. 10X assets → 10X sales → 10X profits. (assuming they can sell all of it.)

With the current PE of 300, if we assume correction to 150 PE for the next year, the 10/2 = 5X movement on the stock is possible. Of course, this assumes the stock will command 150 PE. If it commands 75, that gives 2.5X for FY 26.

I am concerned what the L&T partnership will entail and definitely need more info on it, but I think overall E2E has shifted gears and it’s still going to grow aggressively.

While everyone is focused on Market Coupling, here are some diversification and growth catalysts shaping IEX:

1. Long Duration Contracts Pending CRC Approval:

• IEX has filed for approval of 11-month contracts, awaiting CERC’s final decision.
• Also filed for the Green RTM segment, offering premium pricing opportunities for renewable energy and enabling green power trading just one hour in advance, helping to manage weather-related supply variations.

2. Launch of International Carbon Exchange Subsidiary:

• IEX’s subsidiary is accredited as India’s first renewable energy certificate issuer for globally recognized I-REC digital certificates (representing 1 MWh of renewable energy).

3. Potential Launch of India’s First Coal Exchange:

• Recently announced by the Coal Minister; IEX is collaborating with stakeholders to explore this new platform.

4. Draft Guidelines for EPR Trading and Settlement:

• CPCB’s draft guidelines for Extended Producer Responsibility (EPR) trading platform (for plastics, e-waste, battery waste, etc.) aim to enable transparent price discovery for recycling compliance certificates. IEX is evaluating entry into this segment.

5. CERC’s Proposed Enhancements to Market Structure:

• Proposed changes in Term Ahead Market (TAM) aim to standardize products across exchanges, boost liquidity, and increase Real-Time Market (RTM) volumes due to stricter grid discipline requirements.

6. Cross-Border Power Flexibility:

• CEA now allows plants selling power cross-border to redirect unscheduled power to Indian exchanges, potentially improving liquidity.

7. Extension of Section 11 for Coal-Based Plants:

• MoP’s directive to operate imported coal-based plants until Dec 31, 2024, supports demand on exchanges.

8. New Rules for Late Payment Surcharge (LPSC):

• Directives for long-term PPA generating stations to offer un-requisitioned power (URS) on exchanges, with 100 million units of URS power now available daily.

9. Enhanced Compliance Norms Under Gujarat’s Energy Conservation Act:

• GERC’s stringent penalties for unmet renewable purchase obligations aim to strengthen the REC market, maintaining a vibrant platform for green certificates.

Overall, these developments enhance liquidity, help manage power prices, and support DISCOMs and C&I consumers in optimizing procurement costs. Positive signals for IEX growth!

Vendor is selected by farmers under KUSUM B

Will shareholders of EFC get equity allocation in SMREITs when it gets listed ?

Feel free to go through the concall. I don’t think that the data supports your point with them getting 30% share (via farmer’s preference). In any case, I am only repeating what management is saying. I have no knowledge of the ground reality or I have done any channel checks.