Motilal Oswal's research report on MCX
Net profit grew 4% YoY and 13% QoQ to INR414m. PAT was slightly lower than our estimate as lower other income was offset by a better-thanestimated tax rate. Overall volumes stood at INR28.7t, better than our estimate of INR27.4t. This resulted in an 8% beat in revenue, which stood at INR1.1b. Staff cost rose 10% YoY and 25% QoQ to INR227m. Software support charges saw a higher growth of 26% YoY and 7% QoQ. Overall EBIT, at INR435m, was better than our forecasts by 10%. EBIT margin stood at 40% v/s 34.5%/47.4% in 1Q/4QFY22. The YoY improvement was led by incremental revenue from the Options segment. Other income declined sharply by 57% YoY and 36% QoQ to INR93m (below our forecast).
Outlook
We like MCX for its near-monopoly in the Indian Commodity Exchange segment (92% market share). We have upgraded our FY23/FY24 EPS estimate by 9%/11% to factor in a better than expected traction in Option volumes. We value the stock at a multiple of 30x FY24E EPS. We maintain our Buy rating with a revised TP of INR1,600/share.
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