There are many discussions around market decoupling and its potential impact on the growth and share price appreciation of IEX.
As many boarders have already mentioned in this thread, several times in the past, Exchange is a highly regulated business, and one can’t do much about it.
But the answer to the question, “Is it a profitable business with consistent cash flow generation?” is a resounding “YES!”
My rationale for continuing to hold IEX is as follows.
-As per the Annual Market Monitoring Report 2021–22 (p. 17), only 7.38% of the total energy supplied by the country is traded through exchanges. However, if you look at European markets, it an astounding 29–32%. As we mature, exchange traded power contracts will definitely grow, and IEX will be a major beneficiary along with other power exchanges
-In any business, the market leader and the first mover have a definite advantage compared to new entrants.
-New business verticals like carbon credit trading
-As the gas exchange matures, this can positively impact the earnings of IEX
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