MCX Q1 Profit Soars 50%, Stock Split Announced Amid Morgan Stanley's Cautious Stance
Multi Commodity Exchange of India Ltd. (MCX) reported a 50% increase in net profit to Rs 203.19 crore for Q1, with revenue up 28.1% to Rs 373.21 crore. EBITDA rose 51% to Rs 241.66 crore, and EBITDA margin expanded to 64.8%. The board approved a 1:5 stock split. Despite the strong performance, Morgan Stanley maintained an 'underweight' rating, citing expensive valuation and revenue concentration concerns. Operational challenges include higher employee expenses and declining average daily transaction revenues.

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Multi Commodity Exchange of India Ltd. (MCX) has reported a robust financial performance for the first quarter, accompanied by a significant corporate action. However, the exchange faces a cautious outlook from a major financial institution.
Strong Q1 Performance
MCX delivered impressive quarterly results:
- Net profit surged 50% to Rs 203.19 crore, up from Rs 135.46 crore in the same period last year
- Revenue increased by 28.1%, reaching Rs 373.21 crore
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) rose 51% to Rs 241.66 crore
Margin Expansion and Profit Beat
- EBITDA margin expanded to 64.8% from 55% in the comparable period
- Profit after tax exceeded analyst estimates by 4%
Stock Split Announcement
MCX's board has approved the company's first-ever stock split:
- Split ratio: 1:5
- Face value reduction: from Rs 10 to Rs 2 per share
Morgan Stanley's Cautious Stance
Despite strong quarterly performance, Morgan Stanley maintained an 'underweight' rating on MCX, citing:
- Expensive valuation
- Low conviction on revenue sustainability
- Significant revenue concentration in a few commodities
Operational Challenges
Some operational challenges were noted:
- Higher employee expenses led to Core EBITDA missing estimates by 2%
- Average daily transaction revenues declined from Rs 525 lakh to Rs 456 lakh
Market Implications
- Strong financial performance contrasts with cautious analyst outlook
- The stock split could potentially increase market participation and liquidity
- Investors may focus on MCX's ability to diversify revenue streams and maintain growth