Release Date: January 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Multi Commodity Exchange of India Ltd (BOM:534091, Financial) reported a 57% year-over-year growth in consolidated income from operations, reaching INR301 crores.
- The company achieved a significant increase in Profit After Tax (PAT) to INR160 crores, compared to a loss of INR5.35 crores in the same quarter last year.
- Average daily turnover (ADT) for futures and options combined reached INR2,09,000 crores, marking a 106% year-over-year growth.
- The exchange saw a 49% growth in traded clients, reaching 11 lakh clients for the first time during the nine-month period.
- Multi Commodity Exchange of India Ltd (BOM:534091) received the Digital Transformation and Resilience Award at the Red Hat APAC Innovation Awards 2024 and was named the leading commodity exchange by CPAI.
Negative Points
- Despite the growth, there is uncertainty regarding the timeline for launching new products such as weekly options and index weekly options contracts.
- The company faces regulatory challenges, particularly in the area of co-location services for commodity derivatives, which are not currently approved.
- Base metals volumes have not picked up as expected, and the company is exploring rationalization around warehouses to drive growth.
- The technology cost has seen a decline, but there is uncertainty about whether this reduction is sustainable in the long term.
- There is a high concentration of revenue from bullion futures, which could pose a risk if market conditions change.
Q & A Highlights
Q: What are the top three priorities for MCX under the new leadership?
A: Praveena Rai, MD and CEO, emphasized operational excellence, strong compliance, and innovation as the top priorities. The focus will be on enhancing technology, maintaining regulatory compliance, and developing new products and contracts to drive growth.
Q: What is the timeline for launching new products like weekly options and index contracts?
A: Praveena Rai stated that MCX is ready with the infrastructure for new products, including index options like METLDEX and BULLDEX. These are expected to be launched in the next few months, pending regulatory approvals.
Q: How does MCX plan to increase participation and trading volumes?
A: Praveena Rai highlighted efforts to increase participation through awareness programs and by introducing new products. MCX aims to attract more retail and institutional participants, including FPIs, to boost trading volumes.
Q: What is the status of the technology costs and their sustainability?
A: Chandresh Shah, CFO, explained that technology costs have decreased due to reduced premium services. The provision for TCS AMC is included, but specific figures are confidential. Efforts are being made to keep costs sustainable.
Q: What are the plans for launching electricity derivatives and a coal exchange?
A: Praveena Rai mentioned that electricity derivatives are a priority, and MCX is exploring this opportunity. The coal exchange is also being considered, but its launch depends on government actions and market conditions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
