MCX down 8% as Morgan Stanley predicts 48% downside in stock post Q4 result

MCX stock price update: Morgan Stanley has maintained an 'Underweight' rating on the stock with a target price of Rs 2,085

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Shares of Multi-Commodity Exchange (MCX) slumped 7.7 per cent to Rs 3,715.15 on the BSE in Wednesday's intraday trade after the commodity exchange's March quarter (Q4FY24) results missed Street's estimates. Given this, global brokerage Morgan Stanley has maintained an 'Underweight' rating on the stock with a target price of Rs 2,085. This implies a massive 48.2 per cent downside from current levels.

At 12:00 noon, the shares were down 6.5 per cent at Rs 3,765 per share as against 0.4 per cent rise in the benchmark S&P BSE Sensex.

While the company was back in the black on a sequential basis with a net profit of Rs 87.8 crore, its revenue fell by 5.4 per cent to Rs 181.1 crore in Q4FY24.

On a yearly basis, MCX has reported profit of Rs 5.4 crore in Q4FY23, and revenue of Rs Rs 133.75 crore. Ebitda, too, saw an annual increase of 443 per cent to Rs 120.33 crore as against Rs 22.15 crore in the corresponding quarter of the previous fiscal.

Morgan Stanley said MCX's Q4FY24 revenue missed its estimates by 8 per cent, while core Ebitda and net profit, respectively, fell 20 per cent and 15 per cent short of the predicted number.

"The operating revenue came in lower than estimates. Furthermore, costs were on the higher side versus estimate. Thus, we await segment-wise revenue details, along with information of recurring costs during the analyst call," it said.

Meanwhile, foreign portfolio investors (FPIs) has received approval to participate in certain cash-settled non-agricultural commodity derivatives contracts and indices.

"FPIs falling under the categories of individuals, family offices and corporates will be allowed to engage in eligible cash-settled non-agricultural commodity derivatives contracts, as well as indices comprising such cash-settled non-agriculture commodities," MCX said on April 20.

FPIs belonging to categories viz. Individuals, Family Offices and Corporates, it added, will be allowed a position limit of 20 per cent of the client level position limit in eligible commodity derivative contracts and indices.

In the first nine months of fiscal year 2024, energy contracts constituted approximately 78 per cent of the average daily turnover in both options and futures trading on MCX. Additionally, MCX accounted for a market share of 99.52 per cent in Indian energy futures.