We initiate coverage on IC Enterra with Outperform rating and a 12-month target price of TRY15.94/share. Our target price points to a 12-month total return of 58.4%. We expect the stock to outperform the benchmark100 index thanks to; i) attractive valuation, ii) diversification of generation sources with new additions, iii) positive impact of the upcoming capacity, showing effective EBITDA contribution from 2025 onwards. We used a USD-based valuation for our DCF analysis. We assumed a USD-based risk-free rate of 7.5% derived from the benchmark Turkish Eurobond rate. According to our implied target price, we expect IC Enterra to trade with 2025 year-end USD-based EV/EBITDA multiple of 9.71x.
IC Enterra is in a promising transformation IC Enterra’s strategic addition of new renewable capacity, including its flagship 100MWe solar plant and the upcoming 60MWe Bagistas Hybrid, significantly enhances the company’s operational flexibility, efficiency and market presence. This diversified portfolio, combining stable hydroelectric generation with solar’s higher predictability and lower operational risk, enables IC Enterra to manage demand/supply volatility effectively, optimize generation schedules and capitalize on regulatory incentives. Moreover, IC Enterra’s expansion towards international markets improves its operating risks, creating geographic diversification and reducing dependency on Turkish market. We believe IC Enterra will transform into a more robust renewable energy enterprise, showing sustained year-over-year revenue growth.
A pure renewable energy player IC Enterra, an 80% subsidiary of IC Ictas Enerji (IC Holding’s energy arm), invests in solely sustainable energy sources (wind, solar & hydro) and generates %100 renewable energy. The Company has a total renewable installed capacity of 488MWe with 9 hydro power plants (HPP) accounting 80% (388MWe) of the capacity and newly added 1 solar power plant (100 MWe).
Capacity nearly doubles with significant expansion in local and international markets by 2028 IC Enterra aims at nearly doubling its capacity to over 900MWe by 2029 (1200MWe by 2030). Near-term targets (2025-2027) include: i) hybrid solar capacity expansion at existing Bagistas HPP (60MW), ii) capacity extension in Italy WPP (166MW) and iii) first phases of new storage enabled generation plants in Türkiye (55MW, SPP). After 2028, the company plans to add an additional 430MW wind capacity with storage.
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