MCX Q1 Results Review - Volume, Stable Cost Outlook Lead To Earnings Upgrade: ICICI Securities

ICICI Securities Report

Multi Commodity Exchange of India Ltd. Q1 FY25 results had two main takeaways:

1. steady cost profile established; and

2. healthy rise in option volumes offset by lower premium conversion and resurgence in future.

We indicated upside risk to earnings from volume surges, basis commodity volatility in our last note (link), and it has played out on these lines in Q1 FY25, leading to earnings upgrade.

Overall, commodity volume share has also increased (97.8% in Q1 FY25 versus 95.9% in Q4 FY24). Basis improved volume and market share show, we raise our multiple from 35 times to 40 times basis core FY26E price to earning.

Maintain 'Hold'. Basis our target price of Rs 4,295, MCX is trading at 37.5 times FY26E price to earning and 43.2 times FY26E core price to earning (ex-other income).

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