Neutral MCX; target of Rs 1300: Motilal Oswal

Motilal Oswal recommended Neutral rating on MCX with a target price of Rs 1300 in its research report dated May 22, 2023.

Broker Research

May 25, 2023 / 10:47 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on MCX

MCX’s net profit declined 85% YoY to INR55m (79% below our estimate) in 4QFY23, due to higher-than-expected costs and tax. Total volumes grew 61% YoY to INR42t, in line with expectations. However, total revenue at INR1.34b missed our estimate by 5%. Futures volumes declined 22% YoY to INR13t, while option volumes saw strong growth of 15% QoQ to INR28.9t. Staff expenses at INR234m jumped 28% YoY. Software expenses were in line with our expectation of INR874m, up 29% sequentially. The cost increase was a result of a higher payout for extending the contract with 63moons. The total operating loss came in at INR37m v/s our estimate of EBIT of INR98m. EBIT margin stood at -2.8% v/s 47% in 4QFY22 and 20% in 3QFY23. Other income grew 38% YoY to INR201m (est. INR229m). The tax rate stood at 52.6%, much higher than our expectation of 22.1%. Net profit plunged 85% YoY to INR55m (79% below our estimate). For FY23, revenues/PAT grew 40%/4%, while EBIT declined 8% YoY. The board has declared a final dividend of INR19.09 per share for FY23.

Outlook

We have cut our FY24E/FY25E EPS by 13%/12% to factor in the impact of technology transition and a lower option premium turnover-to-notional turnover ratio. We value the stock at 24xFY25E EPS to arrive at a TP of INR1,300 (2% downside at CMP). We reiterate our Neutral rating on the stock.

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