The MCX share price has rallied 4% intra-day today. The exchange took a cautious stance amid rising price volatility in silver.On October 14, the exchange announced a 1.5% hike in silver contract margins and a 1% hike in gold, citing “global volatility in silver prices and shortages in the physical market,” as per its official statement.

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However, that is not the only reason why the Multi Commodity Exchange of India (MCX) is in focus. In fact it is in the middle of a structural shift. Gold and silver, once secondary to crude oil and natural gas, have taken command of the trading floor.  Gold and silver options now make up most of MCX’s volumes. HDFC Securities has reaffirmed its ‘Buy’ rating on the stock, raising its target price to Rs 10,000 from Rs 9,040. This implies around 7% upside and projects annualised revenue growth of 27% between FY25-FY28 on a compounded basis. 

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HDFC Securities on MCX: Shift in revenue mix

As per the HDFC Securities Research, bullion contracts now account for about 60% of MCX’s total notional options volume and 30% of premium average daily turnover (ADTV). That’s a steep jump from roughly 20% and 8% a few quarters ago. The brokerage calls this trend “firmly on track and gaining strength,” citing both product redesigns and rising metal volatility.

In September 2025, MCX’s total options notional stood at Rs 4.5 lakh crore (Rs 4.5 trillion) nearly double the year-ago figure, as per HSIE’s data. Within that, gold options notional ADTV was Rs 1.7 lakh crore, and premium ADTV Rs 828 crore, compared with Rs 31,000 crore and Rs 139 crore respectively a year earlier a staggering 37x and 6x increase. Silver too surged, clocking Rs 1.02 lakh crore notional and Rs 569 crore premium, sharply higher than its modest base last year.

HSIE noted this shift is gradually reducing MCX’s dependence on energy contracts, which once accounted for nearly 85% of volumes. “The concentration risk is being materially diluted,” the report said.

Margin hikes an act of prudence amid silver volatility?

MCX explained that global backwardation, where futures trade below spot prices, had spilt over into Indian markets amid strong industrial and festive demand. The bourse clarified that all silver contracts (1 kg, 5 kg, and 30 kg) continued to trade normally and that its clearing arm, MCXCCL, maintained robust risk controls. 

MCX: Impact of contract redesign

The breakout in bullion didn’t happen by luck. MCX had been reworking its gold and silver options contracts since late 2024 notably switching to monthly expiries instead of bi-monthly ones.

This technical change, as per HDFC Securities, gave traders shorter duration instruments and better liquidity. In plain terms, it aligned MCX’s structure with international norms and made its contracts more attractive to both retail and institutional participants.

Timing helped, the global rally in precious metals spurred by central bank buying, safe-haven flows, and festive demand in India met this product upgrade head-on. The combination sent turnover soaring.

HDFC Securities highlighted how dramatically MCX’s product mix has flipped. In September 2025, gold made up 37% and silver 23% of total notional options turnover, compared to 10% and 1% in September 2024. Crude’s share, meanwhile, slipped to 32% from 79%. As a result, the average daily turnover of the bullion options grew over 700% year-on-year, while crude declined 12%. In Q2FY26, gold and silver together contributed nearly 77% of MCX’s total futures average daily turnover. .

HDFC Securities on MCX: Scope for rerating

HDFC Securities’ latest estimates suggest MCX is heading for a multi-year earnings rerating. For Q2FY26, the brokerage expects revenue of Rs 375 crore, up 31% year-on-year, and EBITDA of Rs 243 crore, translating to a healthy 64.8% margin. Profit after tax is pegged at Rs 201 crore, up 31% from last year.

The analysts expect the exchange’s notional and premium ADTV to grow at a 62% and 33% CAGR respectively through FY28, leading to the earnings surge. They’ve raised FY26–28 revenue and EPS estimates by 7–9%, assigning a 46x P/E multiple on FY27 earnings, up from 45x earlier.

At the current market price, MCX trades at about 42x FY27 estimated earnings, a 10% premium to the BSE. HSIE attributed this premium to MCX’s unique “optionality” new products, lower regulatory risk, and structural tailwinds from commodity market reforms.

Institutional participation could reshape the market

While retail and proprietary traders dominate MCX’s volumes, the next leap, HSIE believes, will come from institutional money. The Securities and Exchange Board of India (SEBI) recently signaled plans to permit FPIs and domestic institutions in non-cash settled commodities, a move that could open new liquidity pools.

Currently, FPIs account for only about 3% of MCX’s total volume, compared to roughly 20% in equities. Even modest institutional participation could transform the market’s depth and stability, as per the brokerage.

HDFC Securities pointed to MCX’s upcoming index products, such as Metldex (metal index) and Bulldex (bullion index), as key catalysts. These cash-settled contracts, tailored for fund participation, could draw higher institutional interest.

Additionally, MCX is preparing to introduce co-location services for high-frequency traders a first in the commodities segment. HSIE sees this as an “untapped lever for liquidity expansion” that could mirror the efficiency seen in equities.

HDFC Securities on MCX: Q2 expectation

How would this reflect on the financials? HDFC Securities expects Q2FY26 to be a softer quarter sequentially. Options revenue is likely to fall 2% quarter-on-quarter to Rs 223 crore, while futures revenue could rise 5% to Rs 114 crore.

The slight moderation, the brokerage explained, is due to product-mix transitions and timing of new launches, not demand fatigue. The brokerage forecasts premium average daily trurnover of around Rs 50,000 crore in Q3FY26, up from Rs 40,000 crore in the previous quarter.

As per HDFC Securities, net revenue is projected to climb to Rs 1,584.7 crore in FY26 from Rs 1,112.7 crore in FY25. The FY26 profit is seen rising  to Rs 863 crore from Rs 560 crore in FY25.