MCX stock and the bullion boom: How much upside is really left?
MCX shares have surged to record highs on the back of gold and silver trading, prompting broker upgrades. But sustaining earnings growth may hinge on whether bullion volumes keep pace with soaring prices.
Just as the surge in gold and silver prices has caught many by surprise, so too has the rally in Multi Commodity Exchange of India Ltd (MCX), whose stock scaled an all-time high of ₹11,219 on Monday. The exchange’s five-for-one stock split will take effect on 2 January, lowering the share price mechanically, but not the valuation. That has already expanded sharply, with MCX shares rising nearly 80% in 2025.
Brokerages are still scrambling to catch up. Motilal Oswal Financial Services raised its FY27 EPS estimate by nearly 27% after the September quarter (Q2FY26) results, pointing to strong volume growth in bullion contracts. Morgan Stanley followed this week, hiking its target price for the MCX stock by a striking 66% to ₹11,135. The upgrade reflects a re-rating of the price-to-earnings multiple rather than a dramatic shift in earnings expectations: the brokerage lifted its FY27 earnings per share (EPS) estimate by 20%.
Bullion trading momentum is visible in the split of MCX’s transaction revenue. In Q2, the exchange earned ₹114 crore from futures and ₹223 crore from options, taking total transaction charges to ₹337 crore, largely flat sequentially. What changed meaningfully was the revenue mix, which tilted in favour of bullion trading from energy trading. Energy trading’s share of transaction charges fell from 64% in Q1 to 57% in Q2, while bullion’s contribution rose from 36% to 43%. The shift reflects both an absolute decline in energy turnover and a rise in bullion turnover. Turnover here refers to the sum of value of futures trading plus premium value of options.
Could transaction charges from bullion trading deliver another upside surprise in Q3? The odds look favourable. Bullion futures trading hit a record high in October, suggesting Q3FY26 (October-December quarter) could outperform Q2. Rising gold and silver prices, especially when accompanied by sharp intraday swings, tend to attract traders. MCX has also rolled out new products aimed at sustaining interest.
One such initiative is the launch of monthly options contracts on the MCX BULLDEX index from October, which tracks gold and silver in a 60:40 ratio. The MCX Management expects these contracts to broaden participation across retail traders, hedgers and institutional investors. The exchange is also evaluating weekly contracts, mirroring those available for equity indices at the BSE Ltd and National Stock Exchange (NSE).
Gold and silver were standout performers in 2025, with prices rising 65% and 148%, respectively. So, if that upward price momentum continues, does it mean MCX revenues will also continue to grow over the next couple of years?
Higher prices do not necessarily mean higher value. Transaction charges depend on the price of the commodity and trading volume. Take the case of equities. The NSE average daily turnover fell to ₹94,400 crore in December, from ₹104,000 crore in the year-ago period. Over the same period, the broader-based Nifty 500 index has gained 6.7%. As a result, the price increased, but volume declined, leading to lower turnover in value terms.
The same risk applies to commodities. It remains to be seen if the trading volume surge in bullion contracts stays intact even when prices continue to move higher. If volumes don’t rise adequately, investors should note that MCX’s transaction revenue could drop despite higher bullion prices. So, given the earnings risk, investors should evaluate if MCX has more steam left, considering its 50x P/E ratio, as per Bloomberg consensus FY27 estimates, is at almost a 25% premium to BSE.
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