Synopsis:
Multi-Commodity Exchange jumped sharply after SEBI’s chairman hinted that it may permit banks and pension funds to trade commodities as well as to analyze FPI involvement in non-agri derivatives.
The shares of this market leader stock, which holds a staggering market share in the future commodities market, are in focus after the market regulator’s (SEBI) chairman made a key announcement. In this article, we will dive more into the details.
With a market capitalization of Rs 40,354 crore, the shares of Multi Commodity Exchange of India Ltd made a day high of Rs 8,034.65 per share, up by 5 percent from its previous day closing price of Rs 7,651 per share. Over the past five years, the stock has delivered a robust return of 353 percent against the NIFTY 50 return of 120 percent.
Reason behind the rally
SEBI Chairman Tuhin Kanta Pandey disclosed that the regulator plans to work with the government to extend the facilities to banks and pension funds to trade in commodities, along with reviewing applications to authorize foreign portfolio investors (FPIs) to trade in cash-settled, non-agricultural derivative products.
Additionally, he also mentioned the initiative to constitute a working group on agri and non-agri commodities to remove market bottlenecks and augment volume growth. These steps are anticipated to invigorate market liquidity, draw the institutional players in, and substantially increase the trading volumes at exchanges such as MCX, which, in turn, will deepen the commodity market ecosystem.
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Financial Highlights
The company’s revenue for Q1 FY26 came in at Rs 373 crore, up by 59 percent from Rs 234 crore in the same quarter last year. Additionally, on a sequential basis, revenue grew by 28 percent from Rs 291 crore in Q4 FY25.
Coming to its profitability, the company reported a net profit growth of 83 percent to Rs 203 crore in Q1 FY26 as compared to Rs 111 crore in Q1 FY25. Additionally, on a QoQ basis, it recorded a growth of 50 percent from Rs 135 crore.
The company has delivered an ROE and ROCE of 34.33 percent and 42.86 percent respectively, and is currently trading at a high P/E of 61.86x as compared to its industry average of 56.31x.
The company has an almost 99 percent market share in the future commodities market. MCX dominates the Indian commodity futures market, holding 100 percent in precious metals & stones, base metals, and index futures, followed by energy with 99.97 percent and agri commodities with 0.65 percent.
The Multi-Commodity Exchange of India Limited (MCX) stands out as a premier commodity derivatives exchange in India, facilitating online trading in a variety of commodities such as bullion, metals, energy, and agricultural products.
Additionally, MCX has formed strategic partnerships with global exchanges like CME, LME, Dalian, EEX, and more, fostering knowledge sharing and promoting global integration.
Written by Satyajeet Mukherjee
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