MCX share price: Buy Multi Commodity Exchange of India, target price Rs 1890: ICICI Securities
The period given by the analyst is one year when the price of Multi Commodity Exchange of India Ltd. can achieve the defined goal.
Multi Commodity Exchange of India Ltd., incorporated in 2002, is a mid-cap company (with a market capitalization of Rs 8126.85 crore) operating in the financial services industry.
For the quarter ended 30-06-2021, the company reported consolidated total income of Rs 108.94 crore, up 0.44% from last quarter in total income of Rs 108.46 crore and down of -11.21% over last year same quarter total income of Rs 122.70 Crore. The company reported after-tax net profit of Rs 39.87 Crore in the last quarter.
Justification of the investment
The key issue for MCX is its ability to recover volumes after the impact of a higher margin trading standard. Base H1FY22 ADTV (14% / 17% less than FY20 / FY21), brokerage reduced FY22E ADTV from Rs358bn to Rs312bn. However, ADTV recovery is not necessarily linear. As such, it reduced ADTV FY23E by just 5% to Rs390bn. Considering the reported ADTV of ~ Rs324bn in FY20, Rs312bn in FY21, Rs433bn in Aug’20 and Rs368bn in Feb’21, ADTV of Rs390bn is achievable by FY23E, which should translate to FY23E EPS of Rs61.4 involving 26E FY23E P / at CMP.
Promoter / FII Holdings
The promoters held 0% of the company’s capital as of June 30, 2021, while the FIIs held 39.3%, the DII 36.7% and the public and others 24%.
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