Wednesday, December 31: Shares of Multi Commodity Exchange of India (MCX) are in focus after global brokerage firm Morgan Stanley upgraded the stock and sharply raised its target price, triggering buying interest in early trade.
What did Morgan Stanley say?
Morgan Stanley upgraded MCX to an ‘Equalweight’ rating and raised its target price by 66% to Rs 11,135, from an earlier target of Rs 6,710. While the revised target implies a limited upside of around 2% from current levels, the brokerage’s commentary has drawn attention to improving fundamentals at the exchange.
Key reason behind the upgrade
According to Morgan Stanley, MCX has seen a strong surge in average daily transaction revenue over the past three months, largely driven by heightened price action across commodities, including sharp movements in precious metals and energy contracts.
The brokerage noted that this momentum does not appear to be fading anytime soon, supported by continued volatility and trading interest in commodity markets.
Earnings outlook improved
On the back of higher transaction activity, Morgan Stanley has materially raised its earnings estimates for MCX. It also flagged upside risks to its forecasts if transaction volumes, which tend to be volatile by nature, remain elevated for a longer period.
Sustained higher volumes could support stronger revenue visibility for the exchange, given its operating leverage.
Stock movement today
Following the brokerage action, MCX shares were trading higher in Wednesday’s session, reflecting investor optimism around improving trading activity and earnings momentum.
The stock is now being closely tracked for:
- Trends in commodity price volatility
- Sustainability of transaction volumes
- Impact on quarterly earnings performance
With commodity markets remaining active, MCX continues to stay on investors’ radar despite the limited near-term upside implied by the revised target.
