Buy MCX; target of Rs 1280: Axis Direct

Axis Direct's research report on MCX

Revenue increased ~5% QoQ to Rs 915 mn due to higher traded value (up ~17% QoQ) led by bullion (up ~17% QoQ) and base metals (up ~32% QoQ). EBITDA margin (including float income) expanded to 23.6% (Q1: 13.7%) driven by operating leverage and flat cost even as yields led to lower float income. PAT was up 4% QoQ at Rs 265 mn.

Outlook
Upbeat on new products, new participants: MCX to launch options on Gold on 17 Oct 2017. It expects launch of options on more commodities in coming quarters. Response from Cat III Alternative Investment Funds in options has been encouraging. Following this, management expects PMS and MFs will also be permitted, which should boost traded value.

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