Hold MCX India; target of Rs 3634: ICICI Securities

ICICI Securities research report on MCX India

MCX’s Q4FY24 results had two main takeaways – 1) slightly higher software cost profile than expected; and 2) the company taking more time before launching new products to gain confidence on new software. Going ahead, upside risk to earnings may arise from volume surges basis commodity volatility. This can be seen through (1) overall revenue growth of 33% in FY24 driven by rising volumes, (2) April futures/options volumes are 44%/24% higher compared to Q4 average.

Outlook

However, downside risk may stem from prolonged delays in new product launches and any policy delay from resignation of MD (last day is 10th May, link). Maintain HOLD. Basis our Target price of INR 3,634, MCX is trading at 34.7x FY26E PE and 35.9x FY26E core PE (ex-other income).