Buy MCX, target Rs 1300; Q1 impacted by lower realization, cash yield: MOST

Multi Commodity Exchange of India (MCX India) has registered muted performance in the quarter ended June 2017 (Q1FY18). Motilal Oswal has kept buy rating on the stock with a target of Rs 1300 per share.

The company's 1QFY18 revenue has declined 6 percent to Rs 59.2 crore and PAT was at Rs 26.3 crore, which was dragged further by lower other income of Rs 27.7 crore.

During the quarter the volumes were down 3.4 percent Q-o-Q and 24.8 percent Y-o-Y, which was dragged mainly by bullion. The contribution from gold and silver combined was 28 percent of overall volumes, which was down from 40 percent in 1QFY17, said Motilal Oswal.

The company expects the recovery in volumes due to implementation of GST, launch of options in gold sometime in 2QFY18, followed by other commodities in 3-6 months and expectation of category-II AIFs to start operations in commodity derivatives by the end of 2QFY18.

The company has retained its market leadership position with a share of 80-90 percent over FY09-17 and with the SEBI's reforms underway, we see volumes on the path to significant recovery, from new products and participants," researh firm said.

At 13:18 hrs Multi Commodity Exchange of India was quoting at Rs 1,094.50, up Rs 15.60, or 1.45 percent on the BSE.