Mumbai: Shares of Multi Commodity Exchange (MCX) of India Ltd rose over 7% on Wednesday morning, after the company reported better than expected results for the quarter ended June 2019. Operating revenues rose 9% year-on-year to ₹79.5 crore, and earnings before interest and tax rose 10.9% to ₹23.6 crore.
This is a steady performance for an exchange that has recently faced the onslaught of increased competition from BSE and NSE, both of which have launched commodity derivatives trading.
But the increase competition has not impacted volumes or price realisations. MCX’s average daily turnover rose 13% to ₹27,473 crore in the June quarter, while average realisations for every ₹1 lakh of turnover stood at ₹2.15 in Q1. That’s a drop of only 1.8% compared to the year ago period, when realisations were at ₹2.19.
“Over the last few months, sentiment around MCX has reversed from concerns around competition from the likes of BSE, to one of optimism, driven by multiple factors feeding into volumes growth. Its monopolistic market share has remained intact, and MCX has now ruled out the possibility of a price cut, which was earlier on the anvil," analysts at Motilal Oswal Financial Services Ltd said in a note earlier this year.
While operating profit growth was steady, thanks to a sharp jump in other income, pre-tax profit jumped 62.6% to ₹55 crore.
Motilal’s analysts have estimated a compounded annual growth rate (CAGR) of 15% in both revenues and profits between FY19 and FY21, on the back of a 21% CAGR in volumes.
MCX shares now trade at ₹873, which discounts annualised June quarter earnings around 25 times.