Shares of the largest exchange in the commodity derivatives market segment in India are in focus on Tuesday, after the company reported financial results with a net profit of Rs. 160 crores in Q3 FY25 after a loss last year.
With a market cap of Rs. 28,320.7 crores, at 12:31 p.m., the shares of Multi Commodity Exchange of India Limited were trading in the red at Rs. 5,553.25, down by around 7.7 percent, as compared to its previous closing price of Rs. 6,017.35.
What’s the news
The fluctuations in the share prices were observed after Multi Commodity Exchange Of India Limited (MCX) announced the financial results for Q3 FY25, through the recent filings with the stock exchanges.
For Q3 FY25, MCX reported income from operations of Rs. 301.4 crores, registering a marginal growth of around 5.5 percent QoQ from Rs. 285.6 crores in Q2 FY25, and an increase of about 57.4 percent YoY from Rs. 191.5 crores in Q3 FY24.
The company’s net profit (PAT) for Q3 FY25 stood at Rs. 160 crores, a sharp turnaround from a net loss of Rs. 5.4 crores in Q3 FY24, and a marginal quarter-on-quarter growth of around 4.2 percent QoQ from Rs. 153.6 crores in Q2 FY25.
Further, EBITDA for Q3 FY25 increased to Rs. 216 crores, compared to Rs. 205 crores in Q2 FY25, reflecting a marginal growth of 5.4 percent QoQ. For the quarter ended December 31, 2024, the EBITDA margin was 67 percent, while the PAT margin stood at 49 percent.
Brokerage Target & Outlook
The shares of MCX fell nearly 11.4 percent to hit an intraday low at Rs. 5,333.15 on BSE during the trading session on Tuesday, after brokerage Morgan Stanley issued an ‘underweight’ rating on the stock, citing Q3 net profit falling short of expectations.
The global brokerage firm Morgan Stanley assigned a target price of Rs. 3,715 per share on MCX, representing a potential downside of nearly 33 percent from the current trading price of Rs. 5,553.25.
The brokerage firm highlighted that, while EBITDA aligned with projections, the company’s net profit has missed its estimates.
Additionally, it pointed out moderation or stagnation in average daily revenue (ADR) over recent months, which could result in further downward revisions to consensus revenue & earnings forecasts. Morgan Stanley also expressed concerns about the current valuation of MCX, considering the uncertainty surrounding revenue sustainability.
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Stock Performance
The stock has delivered positive returns of nearly 83.4 percent of returns in one year, as well as around 46 percent returns in the last six months. Meanwhile, the shares of MCX have fallen by around 13 percent in the last one month.
About the company
Multi Commodity Exchange of India Limited is a demutualised Exchange and has permanent recognition from the Government of India to facilitate nationwide online trading, clearing and settlement operations of commodity derivatives.
MCX has remained the leading Exchange in Commodity Derivatives markets in India, garnering about 96% of the market share in Commodity Futures turnover and nearly 99.14% in case of commodity Options turnover in FY24.
It is worth noting that, during FY24, MCX’s market share in the commodity futures market stood at 95.9% as against 96.8% in the previous year.
The Exchange was the world’s 3rd largest Commodity Options Exchange in 2023, by the number of contracts traded on the platform.
Written by Shivani Singh
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