MOSL: MCX (Buy)-Steady pick-up in volumes continues
MCX: Steady pick-up in volumes continues
(MCX IN, Mkt Cap USD0.5b, CMP INR764, TP INR900, 18% Upside, Buy)
Operating profit inline (excluding one-off expenses)
- Revenue grew 26% YoY to INR769m, in line with our estimate of INR766m.
- Futures volumes grew 34% YoY (+8% QoQ) to INR17t, dominated by crude (+78% YoY) and gold (+53% YoY).
- EBITDA margin of 27.2% (+500bp YoY, -500bp QoQ) was below our estimate of 34% due to higher other expenses (INR45m one-off). Excluding this one-time expense, the margin stood at 33.1% (90bp lower than our estimate).
- PAT growth of 124% YoY (to INR420m) exceeded our estimate of 68.5% YoY owing to higher other income (INR322m v/s our estimate of INR199m) and a lower tax rate (15.3% v/s our estimate of 24%), which emanated from some provisions and deferred tax.
- For 9MFY19, revenue/EBITDA/PAT were up 17.9%/47%/42% YoY.
Distribution reach supporting volumes: MCX highlighted that the uptick in volumes in recent past has not just been a function of volatility but also increasing participation. This is a direct outcome of members combining the equity and commodity arms, leading to a larger salesforce. The next leg of distribution-led participation will likely come from banks.
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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