MCX Stock Rebounds as Global Brokerage Turns Bullish
Shares of Multi Commodity Exchange of India (MCX) climbed nearly 3 percent on December 31, snapping a two-day losing streak after global brokerage Morgan Stanley upgraded the stock and sharply raised its target price. The move came even as gold and silver futures witnessed a steep correction, highlighting investor confidence in MCX’s business fundamentals rather than short-term commodity price movements.
In early trade, MCX shares rose to around Rs 11,198, reflecting a strong positive reaction to the brokerage’s revised outlook. The rally underscores how expectations of sustained trading volumes and higher transaction revenues are driving sentiment around the exchange operator.
A market participant said, “MCX is being valued not on where commodity prices are today, but on the depth, volatility, and participation that these markets continue to attract.”
Morgan Stanley Upgrades MCX and Lifts Target by 66%
Morgan Stanley upgraded MCX shares to ‘Equal-weight’ from its earlier stance and raised the target price sharply to Rs 11,135 per share, from Rs 6,710 per share earlier—a massive 66 percent upward revision. The revised target implies an upside of over 2 percent from the previous closing price of Rs 10,889.
In its note, the brokerage highlighted a sharp improvement in MCX’s earnings outlook, driven by a surge in commodity trading activity. According to Morgan Stanley, average daily transaction revenue has risen significantly over the past three months, largely due to heightened volatility and participation across commodities.
The brokerage added that if transaction volumes remain elevated, there could be further upside risk to earnings estimates, making the current valuation more defensible despite the sharp run-up in the stock.
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Earnings Forecasts Raised Sharply on Volume Momentum
Reflecting its improved outlook, Morgan Stanley materially raised its earnings estimates for MCX over the next three financial years. The brokerage increased its EPS forecasts by 15 percent for FY26, 20 percent for FY27, and 24 percent for FY28, citing operating leverage and strong transaction growth.
At current market prices, MCX trades at around 50 times FY27 estimated earnings and about 47.5 times FY28 earnings. While these valuations appear rich at first glance, analysts argue that exchanges typically command premium multiples during periods of sustained volume growth.
“Once volumes stabilise at higher levels, the operating leverage for exchanges like MCX can be very powerful,” an analyst tracking the sector said.
MCX Rises Even as Gold and Silver Futures Tumble
Notably, MCX shares advanced despite a sharp fall in precious metal prices on the same day. Silver futures on the MCX with March expiry dropped more than 7 percent to around Rs 2,32,228 per kilogram, while May contracts fell nearly 8 percent to about Rs 2,35,512 per kilogram.
Gold futures with February expiry also declined over 1 percent, slipping to around Rs 1,35,155 per 10 grams. The correction in precious metals was attributed to profit booking after a record rally and easing geopolitical tensions, particularly optimism around a potential US-brokered peace deal between Russia and Ukraine.
Despite the price correction, trading activity in commodities remained robust, reinforcing the view that volatility—rather than direction—drives exchange revenues.
Why Commodity Volatility Is Positive for MCX
For an exchange like MCX, heightened volatility typically translates into higher trading volumes, greater participation, and increased transaction fees. The recent surge in commodity prices, followed by sharp corrections, has kept traders active across futures and options contracts.
Morgan Stanley’s note emphasised that MCX’s earnings trajectory is now more closely linked to structural increases in participation rather than one-off price spikes. Rising retail interest, greater institutional hedging, and expanding derivatives usage are seen as medium-term positives.
Key drivers supporting MCX’s outlook include:
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Sustained volatility across metals and energy contracts
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Rising participation from hedgers and traders
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Operating leverage from higher transaction volumes
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Improving visibility on medium-term earnings growth
MCX Share Price Performance Reflects Strong Investor Confidence
MCX’s share price performance over the past year highlights the growing optimism around its business model. The stock has gained over 9 percent in the past one month, nearly 25 percent in the last six months, and an impressive 77 percent in 2025 so far.
The rally has pushed MCX’s market capitalisation above Rs 56,800 crore, placing it firmly among the most valued exchange operators in the domestic market. Investors appear increasingly comfortable paying premium valuations for predictable, asset-light businesses with strong cash generation.
What Investors Should Watch Going Forward
While the outlook remains positive, analysts caution that sustaining high transaction volumes will be key to justifying current valuations. Any prolonged decline in commodity participation or regulatory changes affecting derivatives trading could impact earnings momentum.
Investors are likely to track:
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Trends in average daily turnover on MCX
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Sustainability of commodity volatility
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Regulatory developments in derivatives markets
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Earnings delivery versus upgraded forecasts
As one market observer noted, “MCX is now priced for consistency. The next phase depends on whether volumes normalise at a higher base.”
Investor Takeaway: Volume Story Trumps Price Direction
The sharp upgrade by Morgan Stanley reinforces the view that MCX’s growth story is driven more by trading intensity and participation than by the absolute level of commodity prices. Even as gold and silver corrected sharply, the exchange’s stock moved higher, reflecting confidence in its earnings resilience.
For investors, MCX represents a leveraged play on commodity market activity rather than commodity prices themselves. As long as volatility and participation remain elevated, analysts believe the exchange is well positioned to deliver strong earnings growth over the medium term.
