MSTC shares skyrocket 20% to hit upper circuit. Here’s why

MSTC shares surged 20% to hit the upper circuit at Rs 783.65 on the BSE after the state-owned e-commerce company reported its strongest second quarter since listing and received in-principle approval from the Reserve Bank of India to operate a Trade Receivables Discounting System (TReDS).

Consolidated profit before tax jumped 54.8% year-on-year (YoY) to Rs 99.85 crore in the September quarter, while profit after tax rose 57.7% to Rs 74.92 crore. The company said both were its highest-ever Q2 figures since its listing in March 2019.

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Revenue from operations increased 29.4% to Rs 110.02 crore, while total income rose 36.1% to Rs 139.21 crore. Standalone profit before tax climbed 50.5% to Rs 99.54 crore, while standalone profit after tax increased 51.8% to Rs 74.61 crore.

The earnings growth was supported by a sharp increase in e-commerce activity. MSTC facilitated the sale of residential and multipurpose land parcels in Hyderabad, valued at Rs 2,863 crore, on behalf of the Telangana State Industrial Infrastructure Corporation and the Hyderabad Metropolitan Development Authority.

The company also partnered with the Karnataka Excise Department for the e-auction of liquor shop licences. The first tranche covered 125 licences and fetched around Rs 125 crore for the state government.

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Other transactions during the quarter included the sale of an ONGC oil rig for $5.8 million, the first coal gasification event on behalf of the Ministry of Coal, and auctions of mineral and coal assets.

MSTC also launched the eighth tranche of critical mineral block auctions, involving 13 new blocks and seven previously offered blocks. It sold around 400,000 tonnes of chrome valued at about Rs 718 crore and 1.54 million tonnes of coal valued at Rs 175 crore.

The company’s e-commerce vertical remains its core growth driver. MSTC’s presentation showed that the platform crossed Rs 545.80 billion in transaction value during the first half of FY27, although the company has exited its legacy trading business.

Another trigger for the stock was the RBI’s in-principle authorisation, received on November 11, to set up and operate a Trade Receivables Discounting System (TReDS) under the Payment and Settlement Systems Act. The board has directed the management to take the necessary steps to comply with the conditions attached to the approval.

MSTC said it is developing the TReDS platform and is also examining the feasibility of setting up coal and other mineral exchanges. Its B2B travel portal is ready and is being upgraded for B2C operations.

The Q2 performance marks a sharp improvement in profitability, with income growth significantly outpacing the rise in expenses. Consolidated expenses increased 9.8% YoY to Rs 39.67 crore in the quarter, compared with a 36.1% increase in total income.

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