The share price of India’s leading commodity derivatives exchange hit a 52-week high to Rs.6,695.95 per share on Tuesday after reputed brokerage firm UBS set a target price indicating potential growth.
Share Price Movement
In Tuesday’s trading session, Multi Commodity Exchange of India Ltd’s (MCX India) share price hit a 52-week high of Rs.6,695.95 per share, marking a rise of 1 percent from the previous close of Rs.6,561.15 per share.
The shares have retreated since then and are currently trading at Rs.6,506.05 each. Over the past five years, the share has delivered returns exceeding 470 percent.
What Happened
Multi Commodity Exchange (MCX) of India Ltd. is in the spotlight on Tuesday, after UBS raised its price target on the stock to Rs.8,000 from Rs.5,000, maintaining a “buy” rating. This new target suggests a potential upside of 23 percent from current market price.
In its report, UBS noted that MCX shares have tripled over the past year, driven by earnings upgrades, with a remarkable 198 percent increase in the last 12 months. Earnings estimates for MCX for FY 2025 and FY 2026 have risen by 60 percent and 75 percent, respectively, yet the stock is currently trading at a 40 times price-to-earnings multiple for FY 2026.
“We believe MCX’s trading community is largely a subset of NSE and BSE participants, thus having significant scope for increased participation on MCX,” UBS wrote in its note.
Future Growth
The exchange plans to launch new products, including monthly gold options on November 11, as well as weekly index options and other commodity-related futures and options. UBS noted that these offerings could serve as growth catalysts moving forward and anticipates that the launches will be accelerated with the arrival of the new CEO in the coming weeks.
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.
Financials
In its recent filing, MCX India Ltd reported a 73 percent increase in revenue for Q2 FY25, reaching Rs.285.58 crore, up from Rs.165.11 crore in Q2 FY24. On a quarter-over-quarter basis, revenue grew 22 percent from Rs.234.37 crore in Q1 FY25.
The company also saw a 910 percent increase in net profit, totaling Rs.153.62 crore, compared to a net loss of Rs.19.07 crore in Q2 FY24 and a 39 percent rise from Rs.110.92 crore in Q1 FY25.
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 remaining 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.
Written by – Siddesh S Raskar
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