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Motilal Oswal Report
Multi Commodity Exchange of India Ltd.'s total volumes jumped 79% YoY to Rs 41 trillion in Q1 FY24. Total revenue grew 34% YoY to Rs 1.45 billion (inline with our expectations).
Futures volumes declined 17% YoY (+2% QoQ) to Rs 13.3 trillion, while options volumes surged 207% YoY (+33% QoQ) to Rs 38.4 trillion during the quarter.
Staff costs at Rs 253 million increased 11% YoY. Software expenses surged 362% YoY to Rs 888 million (inline), due to higher payout for extending the contract with 63 moons. The contract has been extended for six months from July 01, 2023 at a consideration of Rs 1.25 billion (plus applicable taxes) per quarter.
MCX's total Ebit stood at Rs 64 million versus our estimate of Rs 59 million as depreciation was below our estimate. Ebit margin was at 4% versus 40% in Q1 FY23/-2.8% in Q4 FY23.
Other income jumped 121% YoY to Rs 204 million (inline with our expectation).
Profit after tax (before loss from associate) stood at Rs 209 million, down 50% YoY (inline).
Adjusted profit after tax dipped 53% YoY to Rs 197 million (4.5% miss due to losses from associate).
We raise our FY24E/FY25E earnings per share by 8%/4% to factor in higher volumes in options, higher other income and lower depreciation. The transition to TCS software will be keenly monitored over the next couple of quarters.
We reiterate our 'Neutral' rating with a one-year target price of Rs 1,480 (premised on 24 times FY25E EPS).
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