Morgan Stanley has maintained its “Underperform” rating on Multi Commodity Exchange of India (MCX) with a target price of ₹2950. This assessment follows the revision in transaction fees to comply with the Securities and Exchange Board of India’s (SEBI) true-to-label norms.
The changes will result in higher per unit transaction fees for MCX. Specifically, the fee for futures will be 1.5%, compared to both the fiscal year 2025 estimate (MSe) and the first quarter fiscal year 2025 (Q1F25) fee of ₹2.07. For options, the fee will be 4.5%, versus the fiscal year 2025 estimate (MSe) of ₹40, and 1.5%, compared to the Q1F25 fee of ₹41.2.
This increase in transaction fees is expected to lead to a 5% increase in the earnings per share (EPS) estimate for the fiscal year 2026 (F26e), all other factors remaining constant. Morgan Stanley notes that large proprietary traders and high-frequency traders will be particularly sensitive to the increase in charges, which could impact trading volumes.
The brokerage firm’s cautious outlook reflects concerns over how these fee adjustments will affect overall trading activity on MCX. Investors are advised to monitor the impact of these changes closely, as they could have significant implications for the exchange’s future performance.
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