MCX Shares Jump 5% as UBS Raises Target Price to Rs. 10,000

On Wednesday, the MCX shares surged 4.67 percent touching a day’s high price of Rs. 8,600 per share on NSE after one of the prominent brokerage firm UBS has significantly raised its target price increasing it from Rs. 7,000 to Rs. 10,000 per share, which is a 43 percent rise and the highest target among analysts covering the stock. This upgrade reflects a potential upside of nearly 22 percent from the recent closing price of Rs. 8,216 as of Tuesday’s closing price on NSE, while underscoring the brokerage’s strong conviction in MCX’s growth prospects. UBS has maintained its ‘Buy’ rating, citing robust trading volumes, favourable market dynamics, and the accelerating pace of new product launches as key drivers behind this bullish stance.

The rationale behind UBS’s upgraded target focuses on several interlinked factors. First, MCX has experienced a surge in trading activity, with average daily value (ADV) in key commodities remaining strong despite heightened geopolitical volatility, such as the recent Israel-Iran conflict, which has fuelled commodity market fluctuations. Futures ADV has risen by about 50 percent quarter-on-quarter, while option premiums ADV has grown by approximately 30 percent in the same period. UBS expects this momentum to continue, supported by ongoing geopolitical uncertainties that typically drive trading volumes higher, according to sources.

Additionally, UBS highlighted the successful launch and promising pipeline of new products on MCX’s platform. Recent introductions include electricity derivatives and monthly bullion contracts, with index options also in development. The brokerage firm believes that these products will further boost near to medium-term growth, improving MCX’s earnings potential and diversifying its revenue streams. UBS has raised its earnings per share (EPS) estimates for FY27-28 by 13 percent to 17 percent and projects a 26 percent CAGR in earnings for FY26-28, driven by operating leverage from higher trading volumes.

UBS also argues that the market is not fully pricing in the growth potential from these new products and the benefits of scale, as MCX currently trades at about 42 times its projected FY27 earnings. The brokerage said it is “meaningfully ahead of consensus” and anticipates that market expectations could rise by 15 percent to 20 percent, similar to previous year upward revisions.

MCX’s recent FY25 results showcase this optimistic outlook. For the fiscal year ended March 31, 2025. The company reported a revenue from operations of Rs. 1,113 crore, up 63 percent year-on-year, and a net profit of Rs. 560 crore, marking a 574 percent increase compared to the previous year. EBITDA (excluding other income) for FY25 soared by 956 percent to Rs. 665 crore, with a robust EBITDA margin of around 60 percent and a PAT margin of 46.32 percent for FY25.

The exchange’s average daily turnover (ADT) for futures and options doubled to Rs. 2,19,063 crore, while the number of traded clients of combined futures and options grew by 39 percent to 12.96 lakh. Notably, the notional ADT of options surged by 115 percent to Rs. 1,91,910 crore, and the premium ADT for options rose by 84.39 percent to Rs. 3,131 crore. Operationally, MCX achieved record deliveries in precious metals and base metals and set new highs in combined daily turnover, reaching Rs. 5,83,572 crore on April 30, 2025. 

Looking ahead, MCX’s future plans involve continued innovation in product offerings, with electricity derivatives, monthly bullion contracts, and index options expected to increase market participation with sustained volume growth.