MOSL: MCX (Buy)-Operationally in line, PAT beat on one-time tax reversal
MCX: Operationally in line, PAT beat on one-time tax reversal
(MCX IN, Mkt Cap USD0.6b, CMP INR801, TP INR950, 19% Upside, Buy)
Operating profit exceeds estimate
- Income from operations increased 2.9% QoQ to INR791m (226bp beat to our estimate of INR774m).
- EBIT grew 24% QoQ to INR211m, with the margin at 26.6% (47bp beat).
- PAT increased 45% QoQ to INR610m (PAT margin of 55%), significantly ahead of our estimate of INR348m, mainly due to the recognition of a minimum alternate tax (MAT) credit of INR206m for the year.
- EPS for the quarter was INR12.0 v/s our estimate of INR6.8.
FY19 financial highlights
- Income from operations increased 16% to INR3,000m from INR2,580m in the previous year.
- EBIT increased 45% YoY to INR1,925.2m, with the margin at 26.5%.
- Net profit increased 34% YoY to INR1,446m from INR1,081m in FY18. EPS rose 34% YoY to INR28.4.
- MCX declared a dividend of INR20/share.
Multiple volume triggers progressing well
- MCX believes that bank distributors can add 15-20% of its volumes, and the impact from this channel will be visible in 2QFY20. Barring ICICI Securities, all meaningful and large banks are on board and should start contributing in a healthy manner. In its next meeting, the SEBI is likely to approve index commodity derivatives. At least 6-7 mutual funds are in active discussion on the kind of products to be introduced in the market. It doesn’t add as much to the ADT, but the depth at the far end of the contract in terms of OI will be enhanced, creating speculative interest.
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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