Comments
Target: ₹2,757
CMP: ₹2,965.80
In Q2-FY24, Multi Commodity Exchange of India (MCX) delivered revenue growth of 29.6 per cent on a y-o-y basis on the back of improving ADT of Options contracts, which increased by 173.6 per cent on a y-o-y basis. MCX has finally transitioned to a new platform from October 16, 2023. However, operating margins were adversely affected during the quarter due to two factors.
Firstly, MCX extended its software contract with 63 Moons until December 2023 at ₹1250 million per quarter. Additionally, there was a SGF contribution of ₹11.40 croreduring the quarter, resulting in negative operating margins of (-)17.4 per cent. We expect MCX to report negative operating margins in Q3-FY24 due to contract with 63 moons technologies is valid till December 31, 2023.
MCX has effectively addressed a significant concern by successfully launching the CDP platform. MCX is now at a pivot point where it gaining massive traction in options contracts, rapidly expanding product offering, regulatory tailwind, and margin expansion expected from CDP platform. While the positives have largely been factored in, the stock is reasonably valued at this point.
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.