The share price of India’s leading commodity derivatives exchange rose by 2 percent on Monday following a remarkable 910 percent YoY increase in net profits. This surge was also driven by strong revenue growth reported in its recent quarterly results.
Share Price Movement
In Monday’s trading session, Multi Commodity Exchange of India Ltd’s (MCX India) share price hit an intraday high of Rs.6,680.00 per share, marking a rise of 1.9 percent from the previous close of Rs.6,561.15 per share. Over the past year, the share has delivered returns exceeding 200 percent.
What Happened
Such a bullish movement in the stock price was an outcome of increase in revenue and net profits of the company in the recent quarter. According to its recent filing, in the quarter ending September 2024, MCX India Ltd reported a 73 percent increase in revenue to Rs.285.58 crore compared to Rs.165.11 crore in Q2 FY24.
Furthermore, on a quarter-over-quarter basis, the company saw an increase of 22 percent from Rs.234.37 crore in Q1 FY25.
In the same period, the company has reported a significant increase in net profit of 910 percent to Rs.153.62 crore in Q2 FY25, up from a net loss of Rs.19.07 crore Q2 FY24 and 39 percent from profit of Rs.110.92 crore in Q1 FY2025.
In terms of return ratios, return on capital employed (ROCE) is currently at 7.15 percent, while return on equity (ROE) is at 5.82 percent. The company has a strong current ratio of 1.42 and a nil debt-to-equity ratio.
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Average Daily Turnover
In FY 2024-2025, Multi Commodity Exchange (MCX) India reported significant growth in Average Daily Turnover (ADT). Futures reached Rs.26,463 crore, up 32 percent from Rs.20,088 crore in FY24. In the options segment, ADT surged to Rs.1,70,040 crore, a remarkable increase of 130 percent from Rs.73,901 crore in FY24.
Commodity Segmental Revenue
The revenue segmentation of Multi Commodity Exchange (MCX) India according to commodity segments reveals that Precious Metals & Stones contribute 67.11 percent to the turnover, followed by Energy at 20.41 percent. Base Metals account for 12.36 percent, while Agri Commodities and Index Futures each make up 0.06 percent of the total turnover.
Impact of SEBI Guidelines
SEBI’s new regulations for F&O trading will impact commodities trading by introducing a fixed transaction fee model and increasing the contract size for index F&O contracts from Rs.5-10 lakh to Rs.15-20 lakh.
Weekly expiries will drop from five to one, and a 2 percent Extreme Loss Margin (ELM) will be applied on expiry day. These measures could lead to a 20-30 percent decline in derivatives volumes, potentially reduced to 20-25 percent if trading shifts to remaining contracts.
Shareholding Pattern
As of the September 2024 shareholding pattern, Foreign Institutional Investors (FII) hold 22.07 percent stake in MCX India Ltd, Domestic Institutional Investors (DII) hold 57.45 percent, and Retail investors hold 20.32 percent. Other Investors hold the reaming 0.19 percent stake in the company.
About the company
Multi Commodity Exchange of India Ltd. (MCX) is India’s largest commodity derivatives exchange, and regulated by SEBI. It facilitates trading in a wide range of commodities, including metals, energy, and agricultural products, providing a platform for price discovery and risk management.
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Written by – Siddesh S Raskar
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