The share price of MCX jumped nearly 7% during intraday trade, putting the domestic commodities exchange back on investors’ radar. Leading brokerage house, Motilal Oswal in its latest report on this stock, has taken a cautious stance. The brokerage has maintained a ‘Neutral’ rating on the stock. The brokerage sees an upside potential of around 14% from current levels.
MCX Q3FY26 performance
MCX delivered a standout performance in the December quarter. The Q3FY26 operating revenue came in at Rs 670 crore, a growth of 121% year-on-year and 78% quarter-on-quarter.
The revenue momentum also translated into a big jump in profits. MCX reported a consolidated net profit of about Rs 401 crore for Q3, up nearly 2.5 times compared to the same period last year.
Let’s take a look at what the brokerage’s take on this stock –
Motilal Oswal on MCX: Volumes hit record highs
As per the brokerage house report, “Overall average daily turnover was up 3.3 times year-on-year to Rs 7.9 lakh crore,” supported by a sharp rise in both options and futures trading.
Options trading, in particular, stood out. Motilal Oswal said, “options notional average daily turnover surged 221% year-on-year to Rs 6.7 lakh crore.” Futures trading also saw strong traction, with average daily turnover rising more than 200% year-on-year.
This spike in volumes pushed transaction fee income sharply higher. As per the brokerage report, “transaction fees for Q3FY26 stood at around Rs 610 crore, up 129% year-on-year.”
Motilal Oswal on MCX: Margins improve, but costs rise too
The brokerage house added that the rising costs capped some of the upside. Total expenses increased 58% year-on-year during the quarter. This is mainly driven by higher staff costs, technology expenses and contributions to settlement-related funds.
The report further added, “total expenses jumped to Rs 170 crore.”
Motilal Oswal on MCX: New products add depth, but focus is on stability
The company has also been expanding its product offering. During the quarter, the exchange launched monthly options contracts linked to the MCX iCOMDEX Bullion Index, which tracks gold and silver prices.
As per the brokerage house report, “the near-term focus is on stabilising recently launched contracts, with future launches to be timed based on internal readiness, market appetite and regulatory processes.”
Motilal Oswal on MCX: Management indicate improving participation
Motilal Oswal highlighted that participation on MCX continued to improve during the quarter. As per the brokerage report, the number of Unique Client Codes (UCCs) rose by around 10% sequentially, driven by “better alignment of user experience across equity and commodity platforms” and the “adoption of common ledger/front-end experience by members.”
The report added that onboarding of new members picked up, with management saying it “expects momentum to continue in the near term.”
According to the report, base metals volumes rose 156% QoQ and 77% YoY.
The brokerage firm in its report noted that MCX is “continuing warehouse rationalisation across base metals.”
Management stated that a strong SGF “provides flexibility in managing margins and enhances settlement safety,” and has “reaffirmed the adequacy of the current framework.”
Motilal Oswal on MCX: Dominant position remains intact
MCX continues to dominate India’s commodity derivatives market. As per the brokerage report, “MCX maintains over 99% market share in commodity futures,” with especially strong positions in precious metals and energy contracts.
Client participation also improved during the quarter. Motilal Oswal said that “client participation increased 7% year-on-year.”
Conclusion
Motilal Oswal noted, “we expect commodity volumes to normalise,” assuming flat activity in January, followed by a decline in February, before a gradual recovery later in the quarter.
Taking this into account, Motilal Oswal has raised its earnings per share estimates for the coming years but continues to value the stock conservatively. The brokerage said, “we reiterate a Neutral rating on the stock with a one year target price of Rs 2,750,” based on long-term earnings assumptions.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.