MCX's steady growth continues; long-term investors should stay invested

MUMBAI: Multi-commodity Exchange ( MCX) maintained its profitability in the last quarter of FY13 while announcing a dividend at par with previous year. The company has been in a pretty flat zone for last three consecutive quarters in terms of topline as well as bottomline. The scrip appears fairly priced and long-term investors can expect steady growth over a period of time.

For the quarter ended March 31, 2013, MCX's total income increased by 9% to Rs. 169.04 crore from Rs. 155.18 crore for the corresponding quarter ended March 31, 2012. The EBITDA increased by 7% to Rs. 112.03 crore from Rs. 105 crore. Net Profit increased by 16% to Rs. 76.63 crore from Rs. 65.95 crore. For the quarter ended March 31, 2013, the EBITDA margin was 66% and PAT margin was 45%.

The board of directors recommended a final dividend of 120% on the face value of Rs. 10 per share for the year ended March 31, 2013. The total dividend for the year ended March 31, 2013 is Rs.24 per share

For the whole FY13 the average daily turnover traded on MCX stood at Rs. 48,790 crore as against Rs. 50,313 crore in the previous year. The total number of commodity futures contracts traded on the Exchange for FY 13 stood at 375.05 million as against 389.85 million in the previous year.

According to data maintained by the regulator of commodity markets in India, Forward Markets Commission (FMC), the value of the turnover traded on MCX represents 87.3% for FY13 and 86% for FY12 of the Indian commodity futures industry in terms of the value of commodity futures contracts traded during the period, informed the company's press release.

The company is currently trading at price-to-earnings multiple of 15, which appears fair considering the stable outlook for the company. Long-term investors should stay invested.