Shares of the Multi Commodity Exchange of India (MCX), the nation's premier platform for trading commodity derivatives, continued their upward trajectory for the second straight session on Wednesday, December 31. The stock surged by 3% to hit an intraday peak of ₹11,198 per share.
Brokerage Boost Drives Rally
This significant gain was fueled by media reports indicating that global financial services giant Morgan Stanley has turned optimistic on the exchange's prospects. According to a report on CNBC TV-18, the brokerage has substantially revised its outlook on MCX.
Morgan Stanley has upgraded its rating for MCX to 'Equal weight' from its previous stance and, more notably, has raised its target price dramatically to ₹11,135 from an earlier ₹6,710. It is important to note that Mint has not independently verified this brokerage report.
What's Behind the Optimistic Revision?
The report attributed this positive shift to a sharp rise in the company's average daily transaction revenue (ADTR). This increase is supported by vigorous price movements and heightened trading activity across various commodities.
Anticipating that this positive trend will persist, Morgan Stanley has also lifted its earnings per share (EPS) forecasts for the company. The brokerage now expects EPS to be 15% higher for FY26, 20% higher for FY27, and 24% higher for FY28 compared to its previous estimates.
The brokerage's analysis points out that MCX shares are currently trading at 50 times the estimated FY27 EPS and 47.5 times the estimated FY28 EPS. It further stated that if the company sustains its current average daily transaction revenue of ₹104 crore through FY27 and FY28, the stock would trade at a price-to-earnings (P/E) multiple of 35x. This would represent a premium of about 5% over its long-term average P/E.
A Stellar Year for MCX Stock
The rally on Wednesday adds to what has been an exceptional year for MCX in the markets. Although the stock had a sluggish start to 2025, ending the first two months in negative territory, it gathered remarkable momentum in the following months and proceeded to scale record highs.
In a landmark moment in mid-November, MCX shares breached the ₹10,000 mark for the very first time and have managed to stay above that psychologically important level since then.
Despite intermittent phases of profit-taking by investors, the stock has delivered an impressive 80% return so far in the calendar year 2025. This marks the third consecutive year of gains for MCX, establishing it as one of the top-performing stocks in the capital markets segment this year.
Bullion Trading: The Key Catalyst
The powerful rally in MCX's share price is closely linked to a substantial surge in trading volumes for gold and silver contracts on its platform in recent months. The sustained upward trend in the prices of these precious metals has drawn a larger number of traders and investors to the exchange.
Market participants are actively using the platform to hedge against risks, speculate on future price directions, or make direct investments in gold and silver. This increased participation has directly bolstered revenue expectations for MCX.
A significant structural change has also played a role. The shift to a monthly expiry cycle for bullion contracts has gained rapid traction, helping the exchange diversify its sources of revenue. Analysts at HDFC Securities project that bullion contracts could contribute approximately 40% of MCX's total premium by the fourth quarter of the financial year 2027.
Disclaimer: This article is intended for educational purposes only. The views and investment recommendations expressed are those of individual analysts or brokerage firms, and not of Mint. Investors are strongly advised to consult with certified financial experts before making any investment decisions.
