MOSL: MCX (Buy)-4Q performance surges with volumes, as expected-Volumes holding up encouragingly at higher levels
MCX: 4Q performance surges with volumes, as expected; Volumes holding up encouragingly at higher levels
(MCX IN, Mkt Cap USD0.6b, CMP INR794, TP INR1020, 28% Upside, Buy)
- 16%/78% QoQ growth in Revenue / EBITDA on high volumes, in line: MCX’s 4QFY18 revenues grew 15.8% QoQ to INR706m v/s estimate of INR694m. EBITDA margin expanded ~12pp QoQ to 34.1%, compared to our estimate of INR34.8%. PAT grew 81% QoQ to INR340, in line with our estimate of 343m. The smart growth in sequential financial performance was a function of 17% QoQ growth in volumes to INR15t.
- Sluggish volumes in 1st 9 months hurt FY18 growth: For FY18, MCX’s revenues grew 5.5% YoY to INR2.58b. EBITDA margin expanded 120bp YoY to 33.1% and PAT declined 17% YoY to INR1.08b. Sluggish revenues growth was due to Average Daily Turnover (ADT) of INR216b v/s FY17 ADT of INR345b. PAT decline was due to lower other income. MCX declared a dividend payout of 80% (INR 17/share) for the year.
- Volumes holding up for now: The pickup of 4th quarter has so far held on to its momentum in the first month of this fiscal, with total turnover in April at INR5.4t. This has been a function of pickup in crude given the price action, and also part revival in Gold Futures. Even Gold Options saw liquidity enhancement scheme come in towards the end of April, driving turnover up by more than 10x. MCX is yet to start charging for them, however.
Multi Commodity Exchange of India Limited (MCX) is a holding company. The Company is engaged in Facilitating Trading, and Clearing and Settlement of Commodity Derivatives. It operates as a commodity futures exchange. It offers its products in various segments, such as Bullion, including Gold, Gold Mini, Gold Petal and Silver; Base Metals, including, Aluminum, Copper, Lead, Nickel and Zinc; Energy, including Crude Oil, Brent Crude Oil and Natural Gas, and Agro Commodities, including Cardamom, Cotton, Crude Palm Oil, Kapas and Mentha Oil. Its MCXCOMDEX is a real-time commodity index based on commodity futures price of an exchange. Other commodity indices developed by the Company include MCXAgri, MCXEnergy and MCXMetal. Its online trading platform is accessible to its members through its trader workstation or computer-to-computer link (CTCL) using multiple connectivity media, including point of presence (POP) connectivity, very small aperture terminal (VSATs) and the Internet.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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