Home Commodities Motilal Oswal Suggests Buying This Commodity Exchange Stock For 18% Short-Term Return

Motilal Oswal Suggests Buying This Commodity Exchange Stock For 18% Short-Term Return

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Target Price, Current Market Price

Target Price, Current Market Price

Target Price, Current Market Price

The Current Market Price (CMP) of MCX is Rs. 1,275. Motilal Oswal has estimated a Target Price for the stock at Rs. 1,500. This stock has the potential to give an 18% return, in the upcoming 1 year. This is a mid-cap company with a market capitalization of around Rs. 6,670 crore.

Stock Outlook  
Current Market Price (CMP) Rs. 1,275
Target Price Rs. 1,500
Potential 1 year return 18.00%
52 week high share price Rs. 2,135.00
52 week low share price Rs. 1,143.00

The company’s sales in FY22 were recorded at Rs. 3.7 b, which is expected to be at Rs. 4.6 b in FY23. Their PAT in FY22 stood at Rs. 1.4 b, which is expected to be at Rs. 2.0 b in FY23. The company’s EBIT Margin in FY22 was recorded at 38%, which is expected to be at 49.8% in FY23.

MCX is also offering a 1.33% dividend yield to its shareholders.

Stock advantages and risks: Motilal Oswal

Stock advantages and risks: Motilal Oswal

According to the brokerage firm, “Over the past couple of years, Commodity Futures volumes on the MCX have seen a decline, led by implementation of new margin norms. Introduction of options and increased volatility in prices led to an improvement in volumes over the past three-to-four months. Implementation of these rules can trigger volume growth in MCX over the medium term. We value the stock at a multiple of 30x FY24E EPS.”

Additionally, Motilal Oswal informs, “The Securities and Exchange Board of India (SEBI) has allowed FPIs to participate in the Exchange Traded Commodity Derivatives (ETCD) market. The participation of FPIs in ETCDs is expected to enhance liquidity and market depth as well as promote an efficient price discovery. SEBI has already allowed institutional investors such as Category III AIFs, Portfolio Management Services, and Mutual Funds to participate in ETCDs.”

Company profile: MCX

Company profile: MCX

The Multi Commodity Exchange of India Limited (MCX), India’s first listed exchange is a commodity derivatives exchange that facilitates online trading of commodity derivatives transactions, thereby providing a platform for price discovery and risk management. The Exchange, which started operations in November 2003, operates under the regulatory framework of Securities and Exchange Board of India (SEBI). MCX launched futures on the MCX iCOMDEX Base Metal Index on October 19, 2020, and became the first Indian exchange to have derivatives on an index of Base Metals. MCX launched futures on the MCX iCOMDEX Bullion index, India’s first bullion index, on August 24, 2020.

Disclaimer

Disclaimer

The above stock was picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

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