Buy This Midcap Commodity Exchange Stock For 15% Gains, TP Rs 2,400: HDFC Securities

Leading brokerage firm HDFC Securities has assigned a 'Buy' call on Multi Commodity Exchange of India Ltd. (MCX) with a target price of Rs 2,400 apiece. The stock is likely to give a robust return of up to 15%.

The shares of MCX, on Thursday, hit a new 52-week high at Rs 2,119.65 per share after a significant announcement of a new trading platform. In an exchange filing, the MCX announced that it would launch a new commodity derivatives platform on October 3, 2023.

"The Multi Commodity Exchange of India Ltd (MCX) has witnessed impressive growth in options volume but uncertainty around the technology shift has been the key overhang. The commodity exchange, in a press release, has indicated that the technology shift is underway and might happen three months ahead of the deadline," the brokerage said.

Buy For TP Rs 2,400 Per Share

According to the brokerage firm, "MCX price performance has a high correlation with volume growth. In the last ten years, the price-to-volume correlation stood at ~55%, which came down to ~12% in the last three years due to technology challenges. The stock has traded at an average one-year fwd P/E 30x and currently trades at a P/E of 23/19x FY25/26E EPS. Net cash stands at INR 10bn (~11% of market cap) with significant improvement in return ratios."

Stock's Market Price, Returns, 52-Week High/Low Prices, & Market Cap

MCX's stock closed 8.53% higher at Rs 2,100.35 per share on the BSE. The stock hit a record high of Rs 2,119.35 per share. Meanwhile, its 52-week low price is Rs 1,156.05 per share. It has a market cap of Rs 10,711.44 Crore.

In the past 1 week, the stock gained 20.03%. Meanwhile, it gained 31% in 1 month. In the past 1 year, it has given 80.63%, whereas, in 3 years, it gave 17.44% positive return. It has given a maximum 204.13% return in the past 5 years.

About - MCX

Multi Commodity Exchange of India Ltd. (MCX) is a midcap exchange and data platform company. The company facilitates online trading of commodity derivatives transactions. It operates under the regulatory framework of the Securities and Exchange Board of India (SEBI).

Disclaimer - The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.