Multi Commodity Exchange of India Ltd (MCX) has witnessed a remarkable 350% surge in its stock value over the last two years. Despite this impressive growth, experts believe there's still more potential.
MOFSL, a leading brokerage firm, has set a target price of ₹6,500 for the stock, indicating a potential upside of 16%. Let’s explore the factors driving this growth and why investors are still keen to buy shares online in MCX.
The future outlook for MCX shares
MOFSL forecasts a substantial increase in MCX’s revenue and profitability over the next few years. The brokerage predicts a compounded annual growth rate (CAGR) of 31% in revenue, 154% in EBITDA, and 119% in profit after tax (PAT) by FY27.
This is largely attributed to a surge in options trading volumes, which are expected to grow by 56%. For those looking to buy shares online, this forecast makes MCX an attractive option for long-term gains.
Upcoming product launches: A major growth driver
One of the primary reasons to consider MCX is the upcoming product launches that are expected to boost trading volumes. The introduction of new offerings like index options, 10g monthly gold futures, cotton seed wash oil, and crude sunflower oil contracts will likely appeal to a broader range of traders.
As these products become available, more investors will likely flock to buy shares online in MCX, driven by the potential for increased trading activity.
Impact of global commodity prices
Volatility in global commodity markets, especially in gold, crude oil, and natural gas, has played a crucial role in MCX’s growth. With rising uncertainties in the global economy, many traders are looking to hedge their investments through commodities, thereby driving up trading volumes.
Retail participation has surged, and this could further motivate investors to buy shares online as they see the potential for sustained growth in MCX’s market share.
Technology and competition: No major threats
MCX has overcome the challenges posed by outdated technology, and with these hurdles behind, it’s in a prime position to capitalise on growth opportunities. According to MOFSL, competition from other exchanges offering similar products won’t impact MCX’s trading volumes.
The exchange’s technological upgrades and new product offerings should maintain its market leadership. This makes now a good time for investors to buy shares online and benefit from MCX’s upward trajectory.
Retail participation and regulatory support
Retail participation in MCX has grown to 9 lakh traders, and this number is expected to rise with the launch of new products and changes to transaction fee structures. Strong offerings from discount brokers and lower contract sizes will further attract retail investors.
Additionally, MCX’s direct market access (DMA) facility is gaining traction among foreign portfolio investors (FPIs), signalling further growth. For those planning to buy shares online, these factors provide a compelling case for investing in MCX.
Profitability and operational stability
MOFSL believes regulatory changes, such as true-to-label charges, will not significantly affect MCX’s profitability. Moreover, MCX’s agreement with TCS regarding technology maintenance costs will bring more stability to its operational expenses, thus improving profit margins.
This level of stability makes MCX an even more attractive option for those looking to buy shares online as the company focuses on scaling its business in the coming quarters.
Ready to invest? Buy MCX shares online today for future growth!
The rally in MCX shares over the past two years is impressive, but with a target price of ₹6,500, MOFSL sees further room for growth. With new product launches, strong retail participation, and stable profitability on the horizon, investors have ample reasons to buy shares online in MCX. As the exchange continues to innovate and capitalise on market opportunities, the potential for long-term gains remains high.
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