Multi Commodity Exchange of India Ltd. share price target

2) P. K. Bindlish CGM, Commodity Derivatives Market Regulation, SEBI 3) G. Mahalingam Whole-time member, SEBI 4) R. Amalorpavanathan Deputy MD, NABARD 5) Supriyo Bhattacharjee DGM, Financial Markets Regulation (FMRD), RBI 6) Dr. Rakesh Junjhunwala Rare Enterprises 7) Kevin Piccoli Deputy Director, US CFTC The discussion focused on a range of topics, such as the steps taken by the...

Revenue increased ~5% QoQ to Rs 915 mn due to higher traded value (up ~17% QoQ) led by bullion (up ~17% QoQ) and base metals (up ~32% QoQ). EBITDA margin (including float income) expanded to 23.6% (Q1: 13.7%) driven by operating leverage and flat cost even as yields led to lower float income.

Maintain BUY with a TP of Rs 1,342, implying a P/E of 35x Sep-19E EPS. MCX delivered robust numbers in 2QFY18. Revenue was up 13.6% QoQ to Rs 673mn (our est. was Rs 688mn), led by 17% up-tick in ADTV, and offset by 1.2% fall in realisations. Bullion (29% of ADTV) recovered sharply (+17.5% QoQ), but is still down 40.7% in 1HFY18. Metals (39% of ADTV) recovered sharply (+31.9% QoQ) after GST implementation in July-17.

at INR207m (30.7% margin, -7.9pp YoY), below our estimate of INR238m (33.7% margin, -4.9pp YoY). PAT of INR292m (below est. of INR363m) was dragged further lower by other income of INR243m (17% below est.). Volumes finally seeing uptick: Volumes were down 14.0% YoY in 2QFY18. Volumes have been subdued for the last three quarters, dragged mainly by bullion Gold (-39% YoY) and Silver (-34% YoY) due to demonetization and then GST-related uncertainty. Contribution from Gold and Silver combined was 29% of overall volumes (39% in 2QFY17). However, QoQ growth of...

Regulatory developments and new products - SEBI has allowed Cat III Alternative Investment Funds to participate in commodities, which should boost volumes. Following this, management expects Portfolio Management Services and Mutual Funds to be permitted.

Revenue declined ~1% QoQ to Rs 868 mn due to lower traded value (down 3.4% QoQ) in bullion (GST uncertainty) and base metals. The quarter saw a deceleration in the decline in gold volumes down 3.5% QoQ vs. 11% QoQ in Q4. EBITDA margin (post float income) expanded 380 bps QoQ, driven by cost redu..

Revenue declined ~1% QoQ to Rs 868 mn due to lower traded value (down 3.4% QoQ) in bullion (GST uncertainty) and base metals. The quarter saw a deceleration in the decline in gold volumes down 3.5% QoQ vs. 11% QoQ in Q4. EBITDA margin (post float income) expanded 380 bps QoQ, driven by cost redu..

Revenue decreased by 5.46% to Rs. 59.19 Cr in Q1FY18 when compared to the previous quarter. Revenue decreased by 5.46% to Rs. 59.19 Cr in Q1FY18 when compared to the previous quarter.

MCX has maintained its dominant position with ~90% market share. We see value in MCX based on (1) Embedded non-linearity, (2) Favorable regulatory environment, and (3) Super-normal growth prospects with start of options trading and new product launches (Indices). We estimate revenue/PAT CAGR of 15/16% for FY18/19E. Maintain BUY with TP of Rs 1,322 implying a P/E of 40x FY19E EPS. MCX delivered poor performance in 1Q; revenue was down 5.5% QoQ to Rs 592mn, below our expectation of Rs 607mn. Drop in revenue was led by 3.4% fall in ADTV to Rs 188bn and 0.5% fall in realisation. Bullion (29% of ADTV), which was witnessing continued stress in trading volume post demonitisation, recovered 2.1% QoQ. Management expects ADTV to increase gradually after successful implementation of GST in July-17.

Options, uptick in bullion hold key: Options trading, Settlement mode, SEBI guidelines pave the way for options trading, Next set of regulatory reforms will be permitting new participants