Although analysts have downgraded their earnings estimates following the quarterly results, many find the stock valuation reasonable even after a 21 percent decline in the past year, suggesting a potential upward rise in their price target on stocks to 47 percent.
The fall in future turnover is being replaced by strong traction of options, they said, adding that the linear increase in alternative volume could help boost business and earnings.
On Monday, the scrip rose 5.45 percent to a high of Rs 1,276.90.
“Over the past year, MCX has performed poorly in the market as its volume was under pressure due to the implementation of peak-margin rules. The EPS will clock at 30 percent CAGR compared to FY22-24, driven by alternative volume. We value MCX 35 times the FY24 EPS, which is its long-term average, “he said.
The brokerage stock has a 12-month target of Rs 1,875.
The company reported a 5 per cent YoY decline in net profit to Rs 36.50 crore in the March quarter, which was offset by a one-way cost of Rs 20.60 crore related to unclear assets.
Revenue operating income increased by 10 per cent to Rs 106.5 crore per annum. Other income increased by Rs 14.6 crore, an increase of 27 per cent year-on-year. The Ebitda margin was 56 per cent while the PAT margin was 30 per cent
MCX Commodity Futures enjoys 72 percent market share which is traded on price terms. As of March 31, the exchange has 592 members, 43.49 million terminals and 1,018 cities and towns. In FY22, bullion trading accounted for 40 percent of MCX’s total revenue; Energy 36 percent; Metals 22 percent and agriculture the remaining two percent.
It has remained positive on the MCX for a steady increase in average daily turnover (ADT) on the back of rising alternative volumes amid rising commodity volatility.
“The progress of other growth initiatives, such as the Gold Spot Exchange and the Electricity Future, poses some challenges. On the cost front, change.
63 will be driven by savings from the moon and will carry a relatively strong (25 percent) consistent profit CAGR on FY22-24. We prefer to be near-exclusive to MCX in the Indian Commodity Exchange segment. We value the stock 30 times more than the FY24E EPS, “he said while suggesting a target of Rs 1,500 on the stock.
ICICIdirect considered the stock to be worth Rs 1,600. It said a significant increase in alternative turnover offset future declines. Average Daily Future Turnover (ADTO) fell 17 per cent YoY to Rs 26,369 crore, due to a decrease in the amount of bullion, noting that the option continued to gain ADTO cracking, increasing by 75 per cent to Rs 15,065 crore.
“Based on the timeline for launching Spot Exchange, we reduced our multiples to 33 times the value of MCX at Core FY24E EPS and Net Cash. Thus, we reduced our target price from Rs 2,000 to Rs 1,600,” it says.
Not all brokerage stocks are positive.
See a possible fall at the counter with a target of Rs 1,210.
“The structural growth accelerator – alternative trading, institutional participation and unclear role – is still in the doldrums. Furthermore: regulatory risk remains challenging leadership; and revenue concentration remains a risk in some commodities. , Which leads to a revised target of Rs 1,120 (previously Rs 1,280), ”it says.