The shares of the Mid-Cap company, specializing in the trading of commodity derivatives across various categories, including bullion, metals, energy, and agricultural products, are in focus after leading Global Brokerage firm UBS initiated a Buy Target with an upside potential of 27 percent.
With a market capitalization of Rs. 48,740.93 Crores on Monday, the shares of Multi Commodity Exchange of India Ltd rose upto 1.3 percent, reaching a high of Rs. 9575.00 compared to its previous closing price of Rs. 9426.15.
What Happened
Multi Commodity Exchange of India Ltd, engaged in the trading of commodity derivatives across various categories, including bullion, metals, energy, and agricultural products, is in focus after a leading Brokerage firm, Swiss investment bank UBS, reiterated its ‘Buy’ rating by raising its price target to ₹12,000 from ₹10,000 earlier on it with an upto 27 percent Upside Potential from yesterday’s close price.
The reasons for the “Buy” target
Strong Innovation & Product Mix
MCX is expanding its product offerings with innovative contracts such as smaller-sized gold contracts, which accounted for 40% of gold trading value in October, up from 30% in April 2025. Additionally, the planned launch of weekly and fortnightly options could further enhance trading activity, showcasing the exchange’s ability to adapt to market demands and attract a broader set of investors.
Robust Growth Outlook
October’s earnings, if annualised, indicate EPS of ~₹320, already aligning with FY30 projections. Elevated bullion prices, higher volatility, and growing interest in energy commodities have contributed to strong trading volumes, indicating a favorable environment for continued revenue growth.
Positive Profitability & EPS Potential
UBS has raised its EPS estimates by 27% for FY26 and 23% for FY27, suggesting strong profit growth. The October performance alone indicates substantial earnings potential, significantly ahead of the current market consensus of ₹158 for FY26 and ₹191 for FY27. This points to a highly attractive profitability trajectory for shareholders.
Strong Market Position & Regulatory Tailwinds
MCX’s leadership in commodities trading in India, coupled with new product launches and market innovation, positions it to capture a growing share of commodity trading volumes. Regulatory clarity on shorter-duration contracts could provide additional upside, reinforcing its competitive advantage.
Attractive Re-Rating Potential
With earnings projections already exceeding market expectations and innovative product launches driving higher trading volumes, MCX is well-positioned for a valuation re-rating. UBS’s revised price target of ₹12,000 implies ~27% upside from current levels, reflecting long-term growth and investor potential.
Financials & Others
The company’s revenue rose by 31 percent from Rs. 286 crores to Rs. 374 crores in Q2FY25-26. Meanwhile, Net profit rose from Rs. 154 crores to Rs. 197 crores in the same period.
The company shows strong financial performance, with a ROCE of 42.9 percent and ROE of 34.3 percent. It has no debt and a perfect Piotroski score of 9, indicating robust fundamentals.
It has delivered impressive profit growth of 25.4 percent CAGR over the past five years and maintains a healthy dividend payout of 46.5 percent, reflecting consistent returns to shareholders.
Multi Commodity Exchange of India Ltd. (MCX) is India’s largest commodity derivatives exchange, providing a platform for online trading, price discovery, and risk management in various commodities like bullion, energy, and agri-commodities. Established in 2003, it was the first to be listed on a national stock exchange in India in 2012, and is regulated by the Securities and Exchange Board of India (SEBI). MCX has a dominant market share in the Indian commodity futures market and is ranked among the top global commodity futures exchanges.
The Commodity Futures Market Share for H1 FY25-26 is largely dominated by MCX, which holds a commanding 98.8% share. NCDX accounts for 1.1%, while others make up just 0.10%.
Looking at the MCX Commodities Futures Turnover for Q2 FY25-26, gold leads with 48.72%, followed by silver at 27.39%. Natural gas contributes 12.83%, crude oil 4.93%, copper 3.93%, zinc 1.31%, aluminum 0.70%, lead 0.12%, index 0.01%, and others 0.05%.
Written by Sridhar J
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