Add Multi Commodity Exchange of India, target price Rs 1669 : ICICI Securities

ICICI Securities has add call on Multi Commodity Exchange of India with a target price of Rs 1669. The current market price of Multi Commodity Exchange of India is Rs 1470.15.

Multi Commodity Exchange of India, incorporated in the year 2002, is a Mid Cap company (having a market cap of Rs 7506.96 Crore) operating in Financial Services sector.

Multi Commodity Exchange of India key Products/Revenue Segments include Fees & Other Charges and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 145.64 Crore, up 23.37 % from last quarter Total Income of Rs 118.05 Crore and up 46.73 % from last year same quarter Total Income of Rs 99.26 Crore. Company has reported net profit after tax of Rs 64.62 Crore in latest quarter.

The company’s top management includes Mr.Saurabh Chandra, Mr.P S Reddy, Mr.Shankar Aggarwal, Dr.Deepali Pant Joshi, Mr.Amit Goela, Mr.Hemang Raja, Mr.Chandra Shekhar Verma. Company has Shah Gupta & Co. as its auditors. As on 30-09-2022, the company has a total of 5 Crore shares outstanding.

Investment Rationale
The brokerage is positive on MCX due to (1) strong continued traction in options, (2) strong business position of being India’s largest commodity exchange with monopolistic market share and (3) ultimate expectations of cost reduction from eventual software migration to new platform, some of these upsides have been captured in the ~30% rally in stock price over last quarter. Hence, it maintain its multiples but downgrade its rating from BUY to ADD with a revised target price of Rs1,669 (Rs1,795 earlier) based on 35x FY24 core EPS (unchanged) of Rs42.6 and cash per share of Rs179/ share. Continuation of problem in transfer of software platform pose downside risk.

Promoter/FII Holdings
Promoters held 0 percent stake in the company as of 30-Sep-2022, while FIIs owned 0 per cent and DIIs 34.87 per cent.