MCX is the leader in commodity derivatives exchanges in India with ~94% market share in terms of commodity futures turnover.
Significant increase in options turnover offset decline in futures
MCX’ share price has grown by ~44% over the past three years (from ~₹ 827 in May 2019 to ~₹ 1212 levels in May 2022).
Factoring in time lines for launch of spot exchanges, we lower our multiple to value MCX at ~33x core FY24E EPS and net cash; thus lower our target price from ₹ 2000 to ₹ 1600.
Apart from MCX, in our coverage we also like 5Paisa.
|(| crore)||FY19||FY20||FY21||FY22||3 year CAGR
|FY23E||FY24E||2 year CAGR
|Annual Volume Traded (in lakh crore)||67.7||86.9||82.6||87.8||100.5||112.6|
|Revenue||106.5||105.8||97.0||9.8%||89.6||18.9%||Healthy growth led by options turnover|
|Total Expenses||53.2||56.3||52.7||0.9%||51.3||3.8%||Focus on efficiency kept opex in check|
|EBITDA %||50.0%||46.8%||45.6%||439 bps||42.7%||727 bps|
|Exceptional Items||-20.6||0.0||-0.1||-||-0.5||-||One-off related to intangible asset during the quarter|
|PAT||36.5||46.5||38.4||-4.9%||34.5||6.0%||One-off impacted profitability|
|Turnover||26,10,387||26,10,387||20,76,920||25.7%||21,55,770||21.1%||Futures volume declined due to moderation in bullion|
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