Shares of Multi Commodity Exchange of India Limited (MCX) rose 5% during the trading hours on Wednesday, July 1 after Jefferies initiated 'buy' coverage on the stock.
MCX share price surged as much as 5.14% to Rs 2,982.6 apiece by 10:22 am, while the benchmark Nifty 50 index is 0.6% up.
In its recent note, Jefferies set a target price of Rs 3,600 on MCX stock, marking an upside 26.8% from its previous closing price of Rs 2,837.2. The brokerage highlighted trading platform's long runway in the "underpenetrated market." The commodity market lags in the equity segment in terms of penetration, however Jefferies expect significant growth ahead, creating a favourable outlook for MCX. As the leading non-agri commodity exchange, the company is well positioned to benefit from rising participation, aided by new product launches and increasing retail interest, which currently remains about one-fifth of NSE's level.
The note estimates MCX's revenue to grow at a 20% CAGR through FY29, while earnings are projected to expand at a 22% CAGR, supported by a 260-basis-point improvement in margins.
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