AI-generated · cited to primary sources · not investment advice · How we research
Multi Comm. Exc.
Our verdict on Multi Comm. Exc. isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Management confirmed the launch of monthly options on silver for both the 30 kg main contract and the 5 kg mini contract during the quarter. (4 met across 4 tracked commitments)
“First Exchange to launch Electricity futures contract in India”
Management confirmed the launch of options on silver products during the quarter. (3 met across 3 tracked commitments)
“So, when I spoke about this pipeline of products that we are going to put into the calendar, we do expect the index options to be a part of that.”
The company confirms adherence to the 51% public shareholding requirement. (2 met across 2 tracked commitments)
“Exchange to ensure 51 per cent of shareholding is held by the public at all times”
H1 FY26 Information technology and related expenses were Rs 46.91 Cr. This puts the exchange on track to meet the lower end of its FY26 guidance of Rs 90-110 Cr. (2 in progress across 2 tracked commitments)
“Yes. I think, Harsh, this number -- the numbers would be around these levels. [Context: tech cost will be around INR 90 crores, let's say, INR- 100 crores, INR 110 crores]”
Management admitted that margins (and by extension expense ratios) are under pressure due to higher employee and SGF expenses in Q1, and they will not 'tighten the belt' during this growth phase. (1 revised, 4 in progress across 5 tracked commitments)
“We won't be able to call out a specific number, but I can tell you, overall, at an expense level, we expect our ratios to stay flat.”
See the full cited Management analysis of Multi Comm. Exc.
How durable is the business?
Options trading volume has seen explosive growth, with Average Daily Turnover (ADT) more than doubling year-over-year, solidifying its position as the primary growth engine. (5 expanding across 1 engine)
“Yes. Chintan, the revenue from futures was INR 227 crores for this quarter and options INR 380 crores.”
Options revenue has significantly expanded, now contributing INR 179 crores for the quarter, driven by a doubling of total average daily throughput (ADT). (4 expanding across 1 engine)
“Yes. Chintan, the revenue from futures was INR 227 crores for this quarter and options INR 380 crores.”
Other income grew by 27.6% for the full year, providing a stable secondary revenue stream alongside core trading operations. (5 expanding across 2 engines)
“Float income, Chandresh... It is around INR 45 crores.”
MCX's network effect is expanding as it was announced as the world's largest commodity options exchange, with traded clients growing 39% YoY to 13 lakhs. (4 expanding, 1 stable)
“MCX continues to command over 99% share across bullion, base metals and energy.”
The regulatory moat remains strong, though management acknowledges the 'real risk' of competition as other exchanges vie for market share in the commodity space. (1 stable)
“competition risk does exist because other exchanges are also vying for share in this space. So we are cognizant of it, and we respect the environment in which we are operating.”
See the full cited Business Model analysis of Multi Comm. Exc.
Where does growth come from?
The SGF contribution is scaling in line with volumes, with Q4 FY25 contribution at INR 18 crores, significantly higher than the previous year. (5 steady across 5 signals, 1 leading indicator)
“Core Settlement Guarantee Fund: 1293 Cr (PY 896 Cr)”
Base metal contracts have seen a doubling of volumes as the market adjusts to the new deliverable pricing mechanism. (1 steady, 1 accelerating across 2 signals, 2 leading indicators)
“Yes. So, we have seen increase in base metals volumes. There is a quarter-on-quarter growth of 156% with a year-on-year of 77%.”
Revenue growth is accelerating significantly, reaching its highest ever level for the exchange, driven by a 60% year-on-year increase in the first quarter. (2 accelerating across 2 signals)
“EBITDA Margin: 76% (PY 67%)”
The company is expanding its product range with new contracts like Nickel and index options to diversify beyond its traditional strengths in energy and bullion. (+2 more signals)
“many successful product launches for Gold Mini, Gold Ten Futures, silver monthly options expiry and smaller denomination contracts, and monthly options on the MCX iCOMDEX Bullion Index.”
Management confirmed that technology investments are ongoing and accounted for in current plans to ensure capacity stays ahead of forecasted volume growth, despite a recent one-off technical glitch. (2 steady across 2 signals, 1 leading indicator)
“we are well placed for at least 3x to 4x kind of a volume. But our intention and objective is to really be ready for more. In fact, market is telling us to be ready for a 10x volume.”
See the full cited Future Growth analysis of Multi Comm. Exc.
What could break the thesis?
The risk remains stable but active. Management took 'urgent actions' to increase margins in two phases during October 2025 due to unexpected market backwardation (when current prices are higher than future prices) in the bullion sector. (2 stable)
“So our margins are the highest in the world and tend to go up quite steeply as volatility steps in. While this does lead to some sort of a constraint in the industry with members having to cough up larger sums for margin”
This risk is intensifying as contributions to statutory funds and regulatory fees rose 30% YoY to Rs 26.81 Cr. While revenue grew faster, these non-discretionary costs represent a growing fixed-cost burden. (2 intensifying)
“And with reference to expense numbers, Chintan, we do believe that our expenses are lagging our growth in terms of what we really need, both from a technology and operating standpoint... So, we will be looking to normalize this over time”
The risk remains stable as MCX maintains a near-monopoly (98.8% market share) in the commodity futures market despite competitive threats. In Precious Metals specifically, it holds 100% market share. (1 stable)
“On the index, while we did launch index options, we haven't seen the kind of traction we were expecting, however, on index futures, we have seen good traction building up”
This risk is stable but recurring. Management confirmed that contributions to the Settlement Guarantee Fund (SGF) and other mandated funds (ISF/IPF) will remain at approximately 7% of total transaction income as volumes grow. (2 stable)
“Aggregate Shareholding of trading members, their associates or agents should not exceed 49% paid-up capital at any point of time”
MCX maintains a near-monopoly in its core segments with a 98.10% market share in commodity futures for FY24-25. Market share in Precious Metals, Base Metals, and Index Futures remains at 100%. (3 stable)
“COMMODITY FUTURES MARKET SHARE FY24-25 MCX 98.10%”
See the full cited Risk analysis of Multi Comm. Exc.
Read the full thesis on Multi Comm. Exc.
AI-generated informational research only. ThesisLoop is not investment advice, a stock recommendation, or a guarantee of returns.