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

| More

Multi Commodity Exchange of India - Lower turnover impacted operating performance - ICICI Securities

Posted On: 2021-01-22 22:52:14 (Time Zone: Arizona, USA)


MCX reported 1% and 8% YoY growth YoY in its 9MFY21 ADTV (commodity futures) and EBITDA respectively. While FY21-TD has been volatile in terms of ADTV (Rs156bn in Apr'20, Rs432bn in Aug'20, Rs318bn in Jan'21), the aggregate earnings impact has been largely neutral. With limited traction in options/indices thus far, ADTV will continue to be the principal earnings determinant. However, the business model remains robust with structural monopoly, high operating leverage, and possible optionalities. Maintain HOLD.

- 9MFY21 EBITDA grew 8% YoY: In 9MFY21, MCX's total commodity futures turnover remained flat and revenues grew 5% YoY. Total operating costs declined 1% YoY - of which employee / technology costs grew +3% / (-)4% YoY and other expenses (-)3% YoY. This resulted in 8% YoY EBITDA growth with EBITDA margin at 48%. Other income grew 12% YoY and utilisation of MAT credit in Q3FY21 led to a lower effective tax rate of 14% in 9MFY21 leading to PAT growth of 9% YoY.

- Factoring-in Rs360bn/Rs400bn ADTV in FY22E/FY23E: MCX has reported an ADTV (FY21-TD) of Rs312bn (commodity futures), which is still 4% down from FY20 levels. In Q3FY20, it reported an ADTV of Rs318bn, down 16% QoQ. We expect ADTV to remain a tad lower at ~Rs321bn in FY21 vs the Rs324bn of FY20. We expect an ADTV growth of 12% / 11% in FY22E / FY23E, which will result in revenue and PAT growth of 15% / 12.5% and 18% / 14% respectively. We expect EBITDA margin to improve from 47% in FY21E (Q3FY21 and 9MFY21 EBITDA margin was 48%) to 52.4% / 54.2% in FY22E / FY23E due to operating leverage benefits.

- Options and index futures volumes yet to pick up: 9MFY21 options ADTV came in at Rs8.6bn, down 2% YoY. MCX had launched trading in index futures of bullion andn Aug'20 and Oct'20 respectively. Data up to 20th Jan'20 shows that bullion index ADTV has been at Rs2.8bn while that of the metal index Rs0.55bn.

- Major risks: 1) Possible impact on intraday futures volumes as upfront margin requirement is scaled up from 25% currently to 50% / 75% / 100% of the requisite margin from Mar'21 / Jun'21 / Sep'21 respectively; 2) regulatory fillip to competition in the exchange business as mooted in the draft paper released by SEBI on 6th Jan'21

- Maintain HOLD with a revised target price of Rs1,746 (earlier: Rs1,692): We value MCX at 35x FY23E core EPS of Rs43 and add distributable cash and investments (Rs227/share) to arrive at our target price of Rs1,746. Our core earnings estimates include operating income and investment returns from restricted cash.

Shares of MULTI COMMODITY EXCHANGE OF INDIA LTD. was last trading in BSE at Rs.1673.4 as compared to the previous close of Rs. 1680.3. The total number of shares traded during the day was 19704 in over 1747 trades.

The stock hit an intraday high of Rs. 1692 and intraday low of 1663. The net turnover during the day was Rs. 33042496.


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:

Emerging Lenders Day - Conference Takeaways - YES Securities

Cement - Prices rise; earnings upgrade to continue - ICICI Securities

Affle India - Navigating privacy and technology challenges will be the key - ICICI Securities

IT Sector Investor Forum - Onwards and upwards - HDFC Securities Institutional Research Desk

Wipro - Beware of integration / impairment risks! - ICICI Securities

Easy Trip Planners Ltd - IPO Review - ICICI Direct

ICICI Direct - Derivatives Weekly View (March 5): Level of 14700 remains crucial for upsides to continue...

Easy Trip Planners Ltd. - IPO - Strong Financials - Reliance Securities

Bharat Forge - Initiating Coverage - Constant evolution - HDFC Securities

Mahindra Logistics - Large-ticket deal win - ICICI Securities

Company Update - Huhtamaki India - ICICI Direct

Gladiator Stocks: IndusInd Bank, VIP Industries - ICICI Direct

Warehousing demand expected to grow around 160% to reach 35 million sq. ft in 2021: JLL

Telecom - Spectrum auction: Prudent investment by Bharti Airtel - ICICI Securities

JB Chemicals & Pharmaceuticals - Analyst meet takeaways - ICICI Securities

IPO Review - MTAR Technologies Ltd - ICICI Direct

Auto Sector - Monthly Volume Round-up - Feb 21 - Decent YoY Growth Continues

Aditya Birla Fashion and Retail - Focus on scaling up new businesses - ICICI Securities

Automobiles (wholesale) - Wholesales push continues despite modest retail trends - ICICI Securities

Aditya Birla Capital - Thoughtful (inclusive) conglomerate business evolution commands premium - ICICI Securities

Jubilant Foodworks - Buying in-the-money options - ICICI Securities

Multi Commodity Exchange of India - Play on rising commodity prices? - ICICI Securities

Gladiator Stocks - Sudarshan Chemical - ICICI Direct

Monthly Commodities Outlook - March 2021 - ICICI Direct

ICICI Direct - Monthly Currency Outlook: Rupee to depreciate further towards 75.00 level...

ICICI Direct - Covid Recovery Pulse - E-way bill generation in February 2021 starts on strong note...

Company Update - Virtual JLR Investor Event - Tata Motors - ICICI Direct

Analyst Meet Update - Aditya Birla Fashion and Retail - ICICI Direct

MTAR Technologies Ltd. - IPO - Huge Opportunities from Clean Energy Bodes Well - Reliance Research

ICICI Direct Derivatives Weekly View (February 26): Failure to move above 14700 may extend declines towards 14300...

Bank: Sector Credit Trends - Slows, Yet again - HDFC Securities

Piramal Enterprises - Pharma day highlights - ICICI Securities

Polymer price tracker - PVC prices rise sharply again! - ICICI Securities

Greenply Industries - Growth returns, at an inflection point - ICICI Securities

Tata Motors - JLR future proofing itself with rapid electric transition - ICICI Securities

Dairy - Higher freight cost and increase in Global SMP prices - ICICI Securities

Analyst Meet Update - Nestlé India (Hold): Focus on product innovation, expanding rural reach - ICICI Direct

MTAR Technologies Ltd - A strong player in booming high precision engineering... - Geojit

Rollover Report for February - March 2021 : Angel Broking

Reaction from industry experts on Q3FY21 GDP numbers

M. Govinda Rao, Chief Economic Adviser, Brickwork ratings on Q3FY21 GDP numbers

Mr. Dhiraj Relli, MD & CEO, HDFC securities views on Q3FY21 GDP Growth Number

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on Q3FY21 GDP

Rollover Analysis - Feb 21, 2021 - YES Securities

Consumer Durables - Demand-driven recovery continues - HDFC Securities

Cement - Demand surprises; earnings upgrade to continue - ICICI Securities

Gladiator Stocks - TeamLease Services - ICICI Direct

Gladiator Stocks - Metals to outshine post multi-year breakout... - ICICI Direct

Company Update - Sundaram Finance - ICICI Direct

Indian pharmaceutical industry to meet an ambition of US$130 billion by 2030 through innovation-led growth: EY-FICCI report



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

disclaimer copyright © 2005 - 2020