Last Updated : Jun 03, 2020 02:06 PM IST | Source:

Buy MCX; target of Rs 1510: Motilal Oswal

Motilal Oswal is bullish on MCX has recommended buy rating on the stock with a target price of Rs 1510 in its research report dated June 01, 2020.

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Motilal Oswal 's research report on MCX

Despite weak volumes over the last week of 4QFY20, MCX has reported strong revenue growth (+33% YoY). Adjusted for one-off expenses, EBIT margin was largely in line with our estimates. Normalization of market hours translated into incipient signs of recovery in traded value for May’20, largely led by gold (+69% YoY) and silver (+121% YoY). - Cues from the GFC period hint at increased interest in precious metals over a 2-3 year period following any crisis or market volatility. The COVID-19 led slowdown in global growth, soft interest rates and liquidity injections should be the key factors driving interest in gold/silver this time. Normalization of margin requirements in the crude segment is likely to drive continued volume growth.


We upgrade our EPS estimates over FY21-22E by 3-6% as we adjust our EBITDA margin trajectory. We continue to like MCX for its near monopoly in the commodity exchanges’ segment in India. Over the course of its listed history, one-year forward P/E multiples averaged ~25x. Our target price implies 25x FY22E EPS. Reiterate Buy.

For all recommendations report, click here

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First Published on Jun 3, 2020 02:06 pm