Multi Commodity Exchange of India Ltd's Q3FY19 consolidated net profit rises 123.7% yoy to Rs42cr: Beats Estimates

The company’s consolidated revenue in the period stood at Rs76.9cr, up 22.5% yoy and 8.2% qoq.

Jan 15, 2019 06:01 IST India Infoline Research Team

Multi Commodity Exchange of India Ltd Q3FY19

Consolidated Results Q3FY19: (in Rs cr)

Q3FY19 YoY (%)
Revenue 76.93 22.5
EBITDA 20.96 36.5
EBITDA Margin (%) 27.3 280
Net Profit (adjusted) 41.99 123.7
***EBITDA margin change is bps

Multi Commodity Exchange of India (MCX) Ltd’s revenue grew 22.5% yoy and 8.2% qoq to Rs77cr. EBITDA came in at Rs21cr, up 36.5% yoy and down 8.5% qoq. EBITDA margin expanded 280bps yoy (contracted 496bps qoq) to 27.25%. The company has reported a net profit of Rs42cr, up 123.7% yoy and 16.9% qoq. Net profit came above the estimate of Rs35cr.

• The average daily turnover (ADTO) of commodity futures contracts traded on the exchange increased 32% to Rs26,614cr in Q3FY19 from Rs20,229cr in Q3FY18.
• Average realization for the quarter stood at Rs2.15/lakh vs Rs2.23/lakh yoy.
• Employee benefit expenses stood at 23% of revenue vs 26.9% yoy, aiding in EBITDA margin expansion.
• Computer technology expenses stood at 7.4% of revenue vs 9.2% yoy, aiding in profitability expansion.
• Other expenses stood at 21.1% of revenue vs 20.3% yoy.
• Depreciation declined 20.8% yoy to Rs3.8cr.

Highlights of 9MFY19 financials
• Operating revenue stood at Rs221cr vs Rs189cr yoy.
• MCX's market share in the commodity derivative space has increased to 91.16% in 9MFY19 as against 89.73% in the corresponding nine months.
• ADTO of commodity futures contracts increased 24% to Rs25,205cr from Rs20,325cr yoy.
• The volume (in terms of commodity futures contracts traded on the exchange) increased 16% yoy to 175mn lots in 9MFY19 as compared to 151mn lots traded in 9MFY18.
• EBITDA for 9MFY19 came in at Rs69cr, up 40.6% yoy; EBITDA margin expanded 530bps yoy to 31.1%.

MCX is benefitting from a conducive regulatory environment, commencement of options trading, and increasing institutional participation. The overall economic growth in India is expected to drive the underlying demand for commodities, which is expected to boost ADTO. Hence, we continue to maintain a "Buy" rating on the stock.

Technical View:

Multi Commodity Exchange of India (MCX) Ltd share price ended at Rs763.50, up 3.65 points, or 0.48%, from its previous close of Rs759.85 on the BSE. The scrip opened at Rs764 and touched a high and low of Rs778 and Rs759, respectively. A total of 9,60,651 (NSE+BSE) shares were traded on the counter. The stock traded below its 200-DMA.

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