Multi Commodity Exchange of India Ltd. share price target

Revenue declined 12% QoQ at Rs 874 mn due to lower traded value (down 10% QoQ). Bullion (~35% of traded value) was hit by continued impact of demonetization and lower volume due to GST uncertainty.

MCXs 4Q performance was poor. Revenue dipped 8.7% QoQ at Rs 626mn, in line with our expectation of Rs 620mn. The drop in revenue was led by a 7.5% fall in ADTV to Rs 194bn. Post demonitisation, Bullion (27% of ADTV) is witnessing continued stress in trading volumes.

Multi Commodity Exchange of India: MCX, the largest commodity exchange in India with ~90% market share, is poised for earnings growth, as it will be the biggest beneficiary of regulatory reforms, which would enhance market depth and liquidity

Revenue grew by 6.5% to Rs. 63.43 Cr in Q3FY17 when compared to the previous quarter.

MCX delivered decent performance in 3Q; revenue was in-line, while margins dragged due to one-off expenses. 25% hike in transaction charges negated the impact of 17% QoQ fall in ADTV. Management expects options trading to begin within four weeks of CDAC guidelines announcement (options trading likely to commence in March or April 2017).

The Securities and Exchange Board of India (SEBI) released a circular ratifying the introduction of options in the commodities derivatives market. According to the circular, exchanges willing to start trading options shall take prior SEBI approval. That would be procedural for MCX, in our view. The circular does not mention which commodities are allowed, nor does it indicate the date from when options...

Following FMC's merger into SEBI, one of the many reforms underway is emergence of universal exchanges. Stock exchanges will be able to become universal exchanges, where equities, debt instruments and currencies are...

FY16 began with great hopes for Multi Commodity Exchange (MCX) as the SEBI-FMC merger was announced and a new MD & CEO was appointed by the board. Additionally, the company had also launched a successful new contract (Crude Oil Mini), which was adding to the company?s average daily traded value (ADTV).