MCX shares zoomed more than 4 times in two years: What’s driving the rally

India’s leading commodity exchange MCX shares hit a high of ₹5,704 per share on the NSE on Tuesday, up by 1.99% from the previous close. The stock hit its 52-week high of ₹5718.65 on NSE on Monday, September 16, taking its gains in the past year to over 225%.

MCX shares were trading 1.63% higher at ₹5,683.8 apiece at 12:48 pm.

Shares of the commodity exchange have rallied around 350% in the past two years on the back of a host of factors such as resolution of trading software issues, higher participation of FPIs on its platform and improvement in its turnover and financial parameters.

MCX shares traded near ₹1,250 per share level in September 2022

Here are the key triggers for the multibagger returns in MCX shares:

Financial performance

MCX reported around 25% Quarter-on-Quarter (QoQ) jump in profit and nearly 30% QoQ increase in revenue to ₹234.4 crore for the June quarter of FY25. Its earnings before interest, taxes, depreciation and amortisation rose by 30% QoQ to ₹132.6 crore. String financial performance boosted a rally in shares. Also, growth in its turnover also supported the stocks rally.

Settling of software blues

MCX switched to a new tech platform of TCS in October 2023 from the software owned by 63Moons Technologies. The switch was viewed as positive by many market experts. Also, MCX cut down on major maintenance charges after the new tech platform. Seamless operations after the switch boosted investors’ confidence.

Growth in options volume to drive revenue, EBITDA

Experts believe that a 56% rise in options volume would further bolster its revenue which is expected to increase over 30% and may result in a 154% improvement in EBITDA over the next two-three years.

FPIs trading

Foreign portfolio investors have shown good traction on the MCX platform. Around 100 FPIs are actively trading on MCX platform. Around 90 FPIs belong to the CAT I category and 10 to CAT II. MCX has also launched the direct market access (DMA) facility which along with regulatory support and rising participation is likely to boost volume growth.