Mehabe score: 5 G Factor: 3 Piotski Score: 5 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 5.
Description
The Multi Commodity Exchange of India Limited is India’s first listed exchange. It is a commodity derivatives exchange that facilitates online trading of commodity derivatives transactions, thereby providing a platform for price discovery and risk management. The Exchange, which started operations in November 2003, operates under the regulatory framework of Securities and Exchange Board of India (SEBI).
Main Points
Monopoly
The company has a 96.48% share in the commodity derivatives market. It controls 100% share of Precious metals & stones, Energy & base metals with exception with agri-commodities where is commands a share of 22.2% only. The 2nd largest player in the commodity exchange market controls the rest 3.4% market share.Site:MCXMain Symbol:MCX
Stock trades at 1644.0, above its 50dma 1568.1. It also trades above its 200dma 1544.48. The stock remains bullish on techicals
The 52 week high is at 1875.00 and the 52week low is at 1432.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has delivered good profit growth of 20.31% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 65.72%
Weakness
– The company has delivered a poor sales growth of 10.70% over past five years.
-Earnings include an other income of Rs.103.87 Cr.
Competition
– The industry trades at a mean P/E of 28.2x. Jubilant Ingrevia trades at the industry’s max P/E of 158.04x. MCX trades at a P/E of 37.2x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 9.0. MCX has a G-Factor of 3 and Piotski scoreof 5.
– Average 1 month return for industry is 14.1%. The max 1- month return was given by C D S L: a return of 40.52 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 88.0 cr compared to Rs 73.0 cr for period ended Jun 2020, a rise of 20.5%
Operating Profits reported at Rs 37.0 cr for period ended Jun 2021 vis-vis 27.0 for period ended Jun 2020 .
Operating Margins expanded 505.9 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 7.8 compared to Rs 7.54 for previous quarter ended Mar 2021 and Rs 11.07 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 405.0 cr for period ended TTM vis-vis sales of Rs 391.0 cr for the period ended Mar 2021, a growth of 3.5%. The 3 year sales cagr stood at 10.5%.
Operating margins expanded to 48.0% for period ended TTM vis-vis 47.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 209.0 cr for period ended TTM vis-vis sales of Rs 225.0 cr for the period ended Mar 2021, falling 7.7%.
Company recorded a healthy Net Profit CAGR of 12.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 16.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 9% on a 1 Year basis vis-vis a return of 26% over the last 3 Years. – The compounded sales growth on a TTM bassis is 4% vis-vis a compounded sales growth of 15% over the last 3 Years. – The compounded profit growth on a TTM basis is 3% vis-vis a compounded profit growth of 42% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 35.49% vis-vis 36.48% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 23.86% vis-vis 22.41% for Mar 2021
Conclusion
– is almost debt free.
– has delivered good profit growth of 20.31% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 65.72% – The company has delivered a poor sales growth of 10.70% over past five years.
-Earnings include an other income of Rs.103.87 Cr.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 1568.1 and is trading at 1644.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
