We recently interacted with the management of Indian Energy Exchange (IEX). FY19 has started on a good note with double digit 15% y-o-y growth in IEX\u2019s traded volumes in 5MFY19. Pricing and costs are stable with no incremental noise bytes from CERC on pricing. We believe IEX is in a sweet spot as it benefits from the rise in short-term traded volumes and market share gains from bilateral traders. The FY18 annual report also points to good times continuing. July-Aug volumes rise 7% y-o-y: In Q1FY19, the buy bids were up 25% y-o-y and sell bids just 1% y-o-y due to coal shortage. Average clearing prices touched a high of Rs 4.67\/unit in May 2018. This dropped to Rs 3.35\/unit in August as sell bids rebounded to 16% y-o-y growth when the coal situation improved. Renewable Energy Certificates (REC) volumes are also trending higher and will benefit IEX on realisations and volumes. Core holding material with steady returns: Management is clear in its vision of gaining share from licensed traders. With FY18-20e 15% volume CAGR, 15% profit CAGR and 40%+ ROEs, we believe it is a good long-term portfolio holding that will offer steady returns. Valuations\/Risks: Between double-digit earnings CAGR in FY18-20e and high dividend payout ratio, IEX has kept ROEs north of 40%. We remain positive with a DCF-based PT of `2,050. Risks: (i) regulator dropping margins; (ii) competition (PXIL) becoming aggressive.