MCX shares climb 5% on strong earnings growth in Q4; Motilal Oswal sees 19% upside

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26 Aug, 2025 12:21

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Multi Commodity Exchange of India shares rallied 5 percent intraday on April 26 after healthy earnings growth in quarter ended March 2019.

The stock was quoting at Rs 840.20, up Rs 39.50, or 4.93 percent on the BSE, at 1340 hours IST.

Profit during the quarter increased 45 percent sequentially to Rs 61 crore.

Motilal Oswal, which has buy call on the stock with a target price at Rs 950 (implying 19 percent potential upside), said profit numbers are significantly ahead of its estimate of Rs 34.8 crore, mainly due to the recognition of a minimum alternate tax (MAT) credit of Rs 20.6 crore for the year.

Company's income from operations increased 2.9 percent QoQ to Rs 79.1 crore, which was ahead of Motilal Oswal's estimate of Rs 77.4 crore.

Earnings before interest and tax (EBIT) grew 24 percent QoQ to Rs 21.1 crore, with the margin at 26.6 percent (47bp beat).

For FY19, its net profit grew 34 percent to Rs 144.6 crore and revenue increased 16 percent to Rs 300 crore compared to the previous year.

Motilal Oswal expects volume/revenue/earnings CAGR (FY19-21) of 20/15/15 percent.

Over the last few months, sentiment around MCX has reversed from concerns around competition from the likes of BSE, to one of optimism, driven by multiple factors feeding into volumes growth. Its monopolistic market share has remained intact, and MCX has now ruled out the possibility of a price cut, which was earlier on the anvil.

The brokerage raised its earnings estimate by 4.1/3.5 percent for FY20/21, led by a lower tax rate. Our price target of Rs 950 discounts forward earnings by 25x and implies 19 percent upside, it said, maintaining buy.

MCX believes that bank distributors can add 15-20 percent of its volumes, and the impact from this channel will be visible in Q2FY20.

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