Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

Multi Commodity Exchange of India - Operating leverage aids strong EBITDA performance - ICICI Securities

Posted On: 2020-10-29 05:46:54


Multi Commodity Exchange of India (MCX) reported robust operating performance in Q2FY21 with revenue growth at 12% YoY and EBITDA margin expansion of 450bps to 55% driven by the high operating leverage inherent in the business model. The increase in volatility resulted in strong traction in bullion ADTV in Q2FY21, which has started to moderate from October. Monetisation of growth levers remains critical for rerating of the stock. Growth levers include charging of new products (index futures), increase in participation from mutual funds, portfolio managers and AIFs, and gradual traction in option trading. Maintain HOLD, with a revised target price of Rs1,692 (earlier: Rs1,650).

- Q2 reaped benefits of operating leverage: In Q2FY21, MCX's total commodity futures turnover and revenues grew 12% YoY, but operating cost increased by only 2% YoY. Employee / technology costs grew 3.4% / 2.3% YoY while other expenses remained flat YoY. As such, operating leverage resulted in 22% YoY EBITDA growth with EBITDA margin at 55%. Lower other income (down 53% YoY) and higher taxes led to 18% YoY decline in PAT.

- Expect 2% earnings growth in FY21E: MCX has reported an ADTV (FY21-TD) of Rs310bn, which is still 4% down from FY20 levels. In Q2FY20, it reported an ADTV of Rs380bn led largely by strong bullion volumes. We expect ADTV to remain a tad lower at ~Rs373bn in H2FY21 as bullion volumes appear to have peaked. We expect an ADTV growth of 5% in FY21E, which will result in revenue and PAT growth of 7% and 2% respectively. We expect FY21E EBITDA margin at 49% (Q2FY21 / H1FY21 EBITDA margin was 55% / 48%). However, given the heightened volatility and expectations of lower margins on crude futures, we expect MCX's ADTV to grow 18% YoY in FY22E. This should result in revenue / PAT growth of 21% / 24% with EBITDA margin at 56% on account of operating leverage benefits.

- Maintain HOLD with a revised target price of Rs1,692 (earlier: Rs1,650): We value MCX at 35x FY22E core EPS of Rs42.4 and add distributable cash and investments (Rs208/share) to arrive at our target price of Rs1,692. Our core earnings include operating income and investment returns from restricted cash.

Shares of MULTI COMMODITY EXCHANGE OF INDIA LTD. was last trading in BSE at Rs.1681 as compared to the previous close of Rs. 1766.1. The total number of shares traded during the day was 278997 in over 2982 trades.

The stock hit an intraday high of Rs. 1760 and intraday low of 1665.05. The net turnover during the day was Rs. 489895362.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com



Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Motherson Sumi Systems - Company Update - Virtual Investor Conference - ICICI Direct

Mutual Fund Review - November, 2020 - ICICI Direct

Sadbhav Engineering - Q2FY21 Company Update - ICICI Direct

IRB Infrastructure - Q2FY21 Company Update - ICICI Direct

Vodafone Idea fund raising - Angel Broking

Rupee - Nov 23, 2020 - Reliance Securities

Crude Oil - Nov 23, 2020 - Reliance Securities

Q2FY21 Bank Result Quick Review - Angel Broking

Banks & NBFC's Sector Update Report - Yet another watershed moment? - HDFC Securities

Galaxy Surfactants - EBITDA/kg has an upside risk - ICICI Securities

Diagnostics - COVID-19 tests continue to trend higher - ICICI Securities

Banking & Financial Services - Sector Update - Nov 22, 2020 - ICICI Direct

Dalmia Bharat Sugar - Q2FY21 Company Update - ICICI Direct

Balkrishna Industries - Industry export growth momentum continues - ICICI Securities

Covid Recovery Pulse - Festive positivity continues in auto retails, E-way bill generation improves... - ICICI Direct

Quant Pick - Exide Industries - ICICI Direct

Shankara Building Products - Q2FY21 Company Update - ICICI Direct

Triveni Engineering - Q2FY21 Company Update - ICICI Direct

Initiating Coverage on Sudarshan Chemical - Leaping into the league of giants - HDFC Securities

Earnings Wrap Q2FY21: Earnings outperform, post Covid recovery picks up steam - ICICI Direct

Vodafone Idea Positive development beneficial for IDFC first bank - Angel Broking

Lakshmi Vilas Bank - Angel Broking

WIPRO Buyback record date announcement - Angel Broking

TCS buyback record date announcement - Angel Broking

Banks Sector Update - Collection efficiency - a positive surprise! - HDFC Securities

Quant Pick - Max Financial Services - ICICI Direct

Graphite India - Q2FY21 Result Update - ICICI Direct

Gladiator Stocks - Maruti Suzuki India - ICICI Direct

Exide Industries - Q2FY21 Result Update - ICICI Direct

Mishra Dhatu Nigam - Execution outlook remains strong - ICICI Securities

Bharat Electronics - Diversifying into multiple revenue streams - ICICI Securities

Wipro Ltd - Virtual Analyst Meet Update - ICICI Direct

Avadh Sugar & Energy - November 2020 - Company Update - ICICI Direct

Mahindra Lifespace Developers - H1FY21 Company Update - ICICI Direct

Quant Pick - Godrej Consumer Products - ICICI Direct

India Equity Strategy Report - Quarterly flipbook - HDFC Securities

Maintain REDUCE on Jubilant FoodWorks - Recovery continues; priced-in - HDFC Securities

Maintain BUY on Ahluwalia Contracts - Q2FY21 - Significant beat on execution - HDFC Securities

Repco Home Finance Limited - Q2 FY21 Result Update - YES Securities

JK Lakshmi Cement - Target upgrade - Angel Broking

BUY on Petronet LNG - Stellar quarter - HDFC Securities

Maintain BUY on Prestige Estates Projects - Capex cycle to gather pace - HDFC Securities

REDUCE on LIC Housing Finance - Tread with caution - HDFC Securities

SELL on New India Assurance - High claims ratio dents profits - HDFC Securities

New orders for L&T - Angel Broking

Cipla - Multi-G agreement - Angel Broing

REDUCE on Eicher Motors - 'Meteor' to drive sales; valuations remain expensive - HDFC Securities

BUY on Galaxy Surfactants - Highest volumes in a quarter - HDFC Securities

Repco Home Finanance - Q2FY21 Result - Angel Broking

NMDC - A single headwind against investment thesis - II - ICICI Securities



Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019