MCX - New Products To Be Key Growth Drivers: Motilal Oswal

Motilal Oswal Report

We expect Multi Commodity Exchange of India Ltd. to deliver a CAGR of 31%/154%/119% in revenue/Ebitda/PAT over FY24-27E, led by a 56% CAGR in options volumes. We highlight several near- to medium-term drivers of volume growth:

1. new product launches - index options, 10g monthly gold futures, cotton seed wash oil, crude sunflower oil contracts and many more in pipeline;

2. continued volatility in key commodity prices (gold, crude oil and natural gas) amid global uncertainties; and

3. a rise in retail participation in the options market.

We expect no impact from competition on MCX's volumes, as similar products are currently available on other exchanges. With the technology overhang behind MCX and near-term potential drivers in place, we see meaningful re-rating potential.

We reiterate our Buy rating on the stock with a target price of Rs 6,500 (premised on 42 times Sept’26E earnings per share).

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