MCX shares under pressure after Morgan Stanley projects 37% downside

Shares of Multi Commodity Exchange (MCX) of India Ltd. opened as much as 5% lower on Friday, November 7, after global brokerage firm Morgan Stanley maintained an 'Underweight' rating on the stock, with a target price of ₹5,860.

The target implies a potential downside of 37% from MCX's last closing price.

Morgan Stanley said MCX's Q2 profit after tax (PAT) was in line with estimates, while core EBITDA (excluding non-operating income) also met expectations despite a 2% reduction in costs.

The exchange had faced a technical issue on October 28, but has identified the root cause and taken steps to address the constraints to prevent recurrence.

According to the brokerage, average daily transaction revenue (ADTR) saw a sharp spike in October to ₹9.5 crore, before moderating to ₹8 crore over the past 10 days. Morgan Stanley mentioned that if this higher ADTR is sustained, there could be a meaningful upside risk to earnings-per-share (EPS) forecasts.

In contrast, UBS recently raised its price target on MCX to ₹12,000 from ₹10,000, citing significant potential for further earnings upgrades, even after accounting for some moderation in trading volumes from October highs.

The brokerage attributed the strong October performance to elevated bullion prices, higher volatility, and rising interest in energy commodities.

Out of 11 analysts tracking the stock, five have a 'Buy' rating, four suggest 'Hold', and two recommend 'Sell'.

MCX shares were trading 2.79% lower at ₹8,992.50. Despite the decline, the stock has gained nearly 45% so far in 2025.