MCX- Earnings Upside Beyond Rs 500 Crore Limited In FY25 But Multiple Expansion Could Happen: ICICI Securities

ICICI Securities Report

Multi Commodity Exchange of India Ltd. has some tailwinds to help it maintain momentum, including the establishment of new software platform and the possible surge in options from miniaturisation of contracts.

We, however, highlight that our FY25E earnings well capture the upside potential, considering monthly future/option average daily trading volume growth estimate of 1.6/9.3% in FY24E and 1.3/4.9% in FY25E.

This is post consideration of volume growth till November 2023. We must also remain cognisant that weekly expiry options may have lower premium rates.

Having said that, multiple expansion can happen considering:

1. Growth in top line options volume as seen in BSE,

2. there are examples of multiple expansion in case of CME between 2004-06 and

3. little threat from competition in case of MCX.

Maintain 'Add'.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.