MCX share price: UBS revises stock rating to 'Buy', ups target to Rs 3,800

Foreign brokerage UBS has upgraded Multi Commodity Exchange of India Ltd (MCX) to 'Buy', citing reasonable valuations, volume resilience and potential medium-term growth triggers. After a 15 per cent correction from its May peak, the brokerage said the stock is trading at 40 times 12-month forward PE, a discount of more than 10 per cent to its three-year average.

UBS pointed to SEBI's recent consultation paper proposing Foreign Portfolio Investment participation in physically settled non-agricultural commodity derivatives and non-agricultural index derivatives.

"We believe this will structurally deepen the commodity market and become an important medium-term growth catalyst for MCX. We expect high volatility in key commodities to persist on an uncertain macro, benefiting MCX. We believe valuation is attractive at 40 times 1-year forward PE, a 15 per cent discount to the three-year average," UBS said.

It flagged re-rating potential based on the consultation, raising EPS estimates. The brokerage raised its price target to Rs 3,800 from Rs 3,600 and said it had increased its earnings per share (EPS) estimates for FY27, FY28 and FY29 by 4 per cent, 8 per cent and 9 per cent, respectively.

"We incorporate the current run-rate in our estimates and raise EPS estimates by 4 per cent/8 per cent/9 per cent in FY27/28/29E. Our new target price is based on 44 times Sep-28E PE, close to the three-year average, from 50 time FY28E PE previously," it said.

UBS said it had recently downgraded the stock after flagging the risk of softer volumes. It noted that MCX volumes had moderated against a strong Q4 FY26, while the share price has fallen 15 per cent over the past three months. Average daily transaction fee revenue has stabilised at Rs 9.5-10 crore, with the current run-rate at Rs 9.9 crore in August month-to-date, which it said was slightly better than expected.

UBS said the combination of stabilising transaction fee revenue, lower valuations after the recent correction and the proposed regulatory changes supported its upgrade on MCX.