On Monday, the shares of Multi Commodity Exchange of India Ltd gained 3.11 % to an intraday high of ₹3,698 per share following an 18% upside by UBS.
At 1:30 p.m, Multi Commodity Exchange of India Ltd shares were trading at ₹3,692 per share, up 2.9 percent from the previous close on the National Stock Exchange. The company has a market capitalization of ₹ 18831 crore.
Multi Commodity Exchange of India Ltd shares has gained a multibagger return of 136% in the last six months and 165% in a year.
The company’s operational revenue has increased by 33 percent year on year from ₹143.57 crore in Q3FY23 to ₹191.53 crore in Q3FY24, while net profit reduced from a profit of ₹ 38.79 crore to a loss of ₹5.35 crore.
Multi commodity exchange or MCX India’s first listed exchange, provides a marketplace for commodity derivatives trading, enabling price discovery and risk management.
In addition, Multi Commodity Exchange Clearing Corporation Limited (MCXCCL), a wholly owned subsidiary of MCX, provides an efficient platform for clearing and settlement of all the trades executed on MCX.
The company holds over 95.3 percent of the market share in commodity Futures turnover and roughly 99.72 percent in commodity Options. It has a monopoly on the trading of precious metals, energy, and base metals.
UBS has given a buy call on Multi Commodity Exchange of India Ltd. The brokerage has given the target price of ₹4,300 per share, representing an upside of 18 percent from Monday’s trading price of ₹3,652 per share.
The brokerage firm indicated that robust expansion is expected to contribute to positive financial results in the ongoing quarter. Additionally, the brokerage highlighted that the introduction of new products by MCX will play a crucial role in driving growth over the near to medium term.
The brokerage also expects compounded earnings of 20% in FY24 to FY26, which is adjusted for one-offs in FY24. Despite MCX shares trading at a forward price-to-earnings ratio 40 times higher, UBS believes this valuation is justified due to the robust growth outlook. The support from volume and realization is expected to bolster options amidst market volatility.
Written by Omkar Chitnis
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