Comments
Target: ₹1,669
CMP: ₹1,458.05
Multi Commodity Exchange of India (MCX) options has now extended the contract with existing software platform provider (63 moons) till June 2023. This is disappointing considering that the new extension (six months) is longer than the first extension (three months) along with the related higher cost incidence now in FY23/24.
While we are positive on MCX due to continued traction in options, strong business position of being India’s largest commodity exchange with monopolistic market share and ultimate expectations of cost reduction from eventual software migration to new platform, some of these upsides have been captured in the nearly 30 per cent rally in stock price over last quarter.
MCX futures ADTV (average daily turnover) dipped 18 per cent MoM to ₹21,600 crore (from volume across categories). Biggest contributors to decline were gold (28 per cent), silver (12 per cent) and natural gas (18 per cent), while crude dipped 4 per cent.
Hence, we maintain our multiples but downgrade our rating from Buy to Add with a revised target price of ₹1,669 (₹1,795 earlier) based on 35x FY24 core EPS (unchanged) of ₹42.6 and cash per share of ₹179/ share. Continuation of problem in transfer of software platform poses downside risk.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.