With a 32% increase in the last month and a 67% increase in the last three months, the MCX share price has produced outstanding results over a variety of time periods. Over the past year, MCX shares have returned an astounding 118%, with a 37% increase on a year-to-date basis.
On strong purchasing momentum, the price of MCX shares surged more than 4% on Wednesday to reach a new 52-week high. On the BSE, MCX shares surged up to 4.93% to reach a record high of ₹8,620.00 per share.
Following a target price boost by international brokerage UBS, which pointed to a robust volume outlook and an increasing product array as major growth drivers, the Multi Commodity Exchange of India (MCX) share price surged.
The MCX has had robust trading activity since April. While the average daily value (ADV) of options premiums has increased by about 30% QoQ, the ADV of futures has surged by almost 50% QoQ.
In a note, UBS stated, “We anticipate that the ADV of key commodities will continue to be robust despite the volatility brought on by geopolitical uncertainties.” New offerings including index options (in the works), monthly bullion contracts, and electricity derivatives could help sustain development in the short to medium term. Based on operating leverage, we project a 26% profit CAGR for FY26–28 and raise FY27E–28E EPS by 13–17%.
Product Development Aids in Growth
Recently, MCX introduced monthly silver options and electricity derivatives. According to UBS, with a conservative assumption of a 3% contribution by FY28, electricity derivatives could potentially add 3–12% to revenue.
Because near-to-expiry contracts are preferred, UBS anticipates strong traction on new silver options. New product launches are anticipated by the brokerage firm to assist growth in the near to medium term.
The share price of MCX is currently trading at over 42 times the price-to-earnings (PE) of FY27E. According to UBS, the market has not yet completely priced in the prospective earnings from new product additions and the advantages of operating leverage brought about by increased trading volumes.
As a result, UBS kept its “Buy” rating and increased the target price of MCX shares from ₹7,000 to ₹10,000 each.
Upgraded FY27E–28E EPS forecasts, a higher valuation multiple of 45x (from 40x previously), and a roll-forward of the valuation base to the FY27E–28E average are all reflected in the updated MCX share price objective. Given the robust growth prospects and product diversification, UBS believes that this value, which is roughly 1.5 standard deviations above the long-term average, is justified.
Performance of the MCX Share Price
Over time, the MCX share price has produced outstanding returns, solidifying its standing as a top market performer. The stock has risen 67% in the last three months and 32% in the last month. MCX shares have increased 37% year-to-date (YTD), yielding a remarkable return of 118% in the last 12 months.
Longer term, the price of MCX shares has shown multibagger gains, increasing 450% over the last two years and yielding an incredible 600% return over the previous five.
