MCX share price jumps over 4% to record high on UBS target upgrade, strong volume outlook
The rally in Multi Commodity Exchange of India (MCX) share price followed a target price upgrade by global brokerage UBS, which cited a strong volume outlook and expanding product portfolio as key growth drivers.
Since April, MCX has witnessed healthy trading activity. The average daily value (ADV) of futures has increased by approximately 50% quarter-on-quarter (QoQ), while options premium ADV has risen around 30% QoQ.
'We expect key commodities' ADV to remain strong amid volatility caused by geopolitical uncertainties' UBS said in a note. 'New products such as electricity derivatives, monthly bullion contracts and index options (in the pipeline) may further support near- to medium-term growth. Considering this, we increase FY27E-28E EPS by 13-17%, and expect a 26% earnings CAGR for FY26-28 based on operating leverage.'
MCX recently launched electricity derivatives and introduced monthly silver options. UBS estimates that electricity derivatives could contribute 3–12% to revenue, conservatively assuming a 3% contribution by FY28, with potential upside.
On new silver options, UBS expects good traction given the preference for near-to-expiry contracts. The brokerage firm expects new product launches to support near- to medium-term growth.
At current levels, MCX share price is trading at around 42x FY27E price-to-earnings (PE). UBS noted that the market is yet to fully price in the earnings potential from new product additions and the benefits of operating leverage arising from higher trading volumes.
Thus, UBS maintained its 'Buy' rating and raised MCX share price target to ₹ 10,000 apiece from ₹ 7,000 earlier.
The revised MCX share price target reflects upgraded FY27E–28E EPS estimates, a higher valuation multiple of 45x (versus 40x earlier), and a roll-forward of the valuation base to the FY27E–28E average. This valuation is approximately 1.5 standard deviations above the long-term average, which UBS views as justified given the strong growth outlook and product diversification.
MCX share price has delivered exceptional returns across timeframes, cementing its position as a strong market performer. The stock has surged 32% over the past month and 67% in the last three months. On a year-to-date (YTD) basis, MCX shares have gained 37%, while delivering an impressive 118% return over the past year.
Over the longer term, MCX share price has generated multibagger returns — rising 450% in the last two years and delivering a staggering 600% return over the past five years.
At 10:45 AM, MCX share price was trading 4.43% higher at ₹ 8,580.00 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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