Multi Commodity Exchange of India Limited — Q1 FY26 earnings call

Call held 4 Aug 2025

Management summary

Multi Commodity Exchange reported a high-performance Q1 FY26, achieving its highest-ever consolidated income of ₹406 crores, a 60% YoY increase, and a PAT of ₹203 crores. The quarter saw robust Average Daily Turnover of ₹3 trillion and successful new product launches across various segments, including electricity futures. While a database anomaly caused a trading delay and EBITDA margins might face slight pressure, the company remains focused on technology excellence, growth investments, and market development, including a recently approved 1:5 stock split.

Highlights

  • Consolidated income of ₹406 crores, marking a 60% YoY growth and the highest ever revenue for MCX.

  • Profit After Tax (PAT) increased to ₹203 crores, reflecting strong financial health.

  • Average Daily Turnover (ADT) stood at a robust ₹3,10,000 crores (₹3 trillion).

  • Successful launch of several new products across bullion, energy, and agri segments, broadening risk management offerings.

  • Increased retail participation in bullion products, with gold 10-gram contract attracting significant interest.

Concerns

  • Delay in trading commencement on one day due to a database anomaly, though management states it was corrected and will not recur.

  • EBITDA margin of around 65% could be 'a little under pressure' going forward due to weaker July volumes.

  • Employee expenses and SGF (regulatory fees) were higher than expected, though partially attributed to Q1 over Q4 impact and growth investments.

Key financials

  1. Consolidated Income ₹406 Cr +60%YoY
  2. Profit After Tax ₹203 Cr
  3. Average Daily Turnover ₹3.10L Cr
  4. EBITDA Margin 65%
  5. Effective Tax Rate 20.7%

What they filed

Q1 FY27: revenue up 88.2%, net profit up 103.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue286 301 291 373 374 +31%666 +121%889 +205%702 +88%
EBITDA179 193 160 241 242 +35%494 +156%665 +316%494 +105%
Net profit154 160 135 203 197 +28%401 +151%530 +293%413 +103%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Transaction Revenue
    ₹109 Cr Futures₹227 Cr Options
  • SGF & Regulatory Fees
    ₹26.8 Cr Contribution

Guidance & targets

Profitability

  • EBITDA Margin Profitability · next 2-4 quarters · Medium confidence could be a little under pressure
    Devesh, these margins could be a little under pressure, but we'll try to work on that because the volumes what we have seen in July are also a little weak. So, these margins are a function of revenue and expenses. So, while we can control the expenses, the revenue is depending on the volumes. So it can be under some pressure, but we'll have to see as the year progresses.

    — Chandresh Shah

Operating Costs

  • Employee Cost Run Rate Operating Costs · rest of the year · High confidence sustain
    So, this quarter run rate should sustain for the rest of the year? Yes.

    — Praveena Rai

Technology

  • Investment in Technology Technology · ongoing · High confidence continue to invest in a manner that is done efficiently
    So, we will continue to invest in technology. We have to continue to invest in technology as we broad base our products and continue to put our foot on the pedal with the kind of growth that we're looking at. So that's a given. Doing it more efficiently is really the question, and I think that's what I covered in the early part that we will continue to focus and deliver the kind of efficiency that we looked at on the technology side. So, will we invest, and will it mean another big bump up of cost, we don't expect so, that we will continue to invest, and we will do that in a manner that is done efficiently.

    — Praveena Rai

Taxation

  • Effective Tax Rate Taxation · future · High confidence around 21%, 22%
    Okay. I am mistaken. I'm sorry for that. So, the effective tax rate would continue to be at 21% in the future also, yes? Yes, around 21%, 22%.

    — Chandresh Shah

Product Development

  • Long-dated Contracts Product Development · future · Medium confidence intend to extend
    And we do -- and I just want to say, sorry Rishi I just want to come in here, but we do intend to extend the long-dated contracts as well. So, we are working on that.

    — Praveena Rai

What to watch in Q2 FY26

Technology System Stability

next quarter
Current Database anomaly caused trading delay in Q1 FY26
Target No recurrence of database anomalies or trading disruptions

Why it matters

Ensuring stable and reliable trading operations is fundamental to MCX's business and investor confidence.

The core issue was immediately identified and fixed, and we are confident that this will not recur.

Risks & concerns

  • Technology stability and operational disruptions

    high

    A database anomaly caused a delay in trading commencement, though it was immediately corrected and management is confident it will not recur.

    Management acknowledged

  • EBITDA margin compression

    medium

    EBITDA margin could be under pressure due to weaker volumes observed in July, impacting revenue.

    Management acknowledged

  • Regulatory constraints on new services (e.g., co-location)

    medium

    Management stated that co-location is 'completely in regulatory remit' and could not provide details on SEBI's rationale or timeline.

    Analyst deflected

  • Regulatory outlook on weekly expiry products

    medium

    Management expects the general regulatory outlook towards weekly expiry to be 'fairly conservative'.

    Management acknowledged

Q&A highlights

4 direct, 1 evasive
Delay in trading commencement and regulatory action Direct
On the day, as mentioned, there was a database anomaly, which led to this delay in overnight clearing system processes, and hence, the delay in opening of trading. That was immediately corrected. We have worked with experts in the space, the topmost experts available. The core issue was immediately identified and fixed, and we are confident that this will not recur. All processes associated with regular root cause analysis, reporting and working with the regulator are in process. And that is a regular process. That's something that we work very closely with the regulator on. So, I would, at this stage, say nothing untoward there.

Addresses a critical operational issue and confirms regulatory engagement and confidence in non-recurrence.

Asked by Devesh Agarwal

Sustainability of EBITDA margin and expense run rate Partial
Devesh, these margins could be a little under pressure, but we'll try to work on that because the volumes what we have seen in July are also a little weak. So, these margins are a function of revenue and expenses. So, while we can control the expenses, the revenue is depending on the volumes. So it can be under some pressure, but we'll have to see as the year progresses.

Provides forward-looking insight into potential margin pressure due to volume fluctuations and management's strategy to manage expenses.

Asked by Devesh Agarwal

Co-location services for MCX Evasive
So, in terms of metals, I think there's been a lot of consultation activity with our stakeholders. There will be some announcements on optimization that we will be making soon. On co-location, as you know, this is completely in regulatory remit, so nothing much for us to say there.

Highlights a regulatory constraint or ongoing discussion that MCX cannot comment on, indicating it's outside their direct control.

Asked by Prayesh Jain

Bullion options performance, cannibalization, and retail participation Direct
So, Amit, point being is that premiums are a function of volatility, and that is why you are seeing a lower premium to notional in bullion as compared to energy products. Having said that, there is no cannibalization of futures due to increase in options if you observe. The futures volumes have also increased while options volumes have increased. So, I think it is the trend, shows that both futures and options grow at the same time and have that potential. ... So, retail participation has also increased. The gold 10-gram contract has brought in a lot of retail interests.

Clarifies the dynamics of options trading, confirms no cannibalization of futures, and highlights the success of new products in attracting retail investors.

Asked by Amit Chandra

Electricity futures outlook and scaling strategy Direct
Yes. So, I think we are also very excited, Chintan, about this contract because it's a completely new product space, and it's a very large market when it comes to India. There is also very stable spot exchange mechanism that exists. So, on the back of all that, I think we have launched the contract. We've seen a good pickup in the early days. In fact, the first month is August. The first month of the contract is August. So, the month now has opened, even though we launched in July to sort of warm the contract up. So, from the 1st of July, the sort of mechanisms really start playing out. ... So, it's been extremely positive, the kind of feedback we've had from corporates. We've had many industrial organizations, in fact, call up proactively wanting to understand more and starting to try how the contract works in any... In any industrial setup, nearly 30% to 40% of their expenses is energy and electricity. So, I think we are finding a lot of commercial corporate participation interest and nearly 50% of our current participation also is from that space.

Provides detailed insight into the strategic importance and early success of electricity futures, including strong corporate interest and open interest.

Asked by Chintan Sheth

Reasons for higher options volumes compared to futures (cost, taxation) Direct
So Shalini, if you understand the cost of trading options is quite cheap as compared to cost of trading futures. And that is a function of what the market prefers. ... It's the taxation angle, Shalini. ... So generally, it is like if you take futures and options, the taxation part is one thing. And apart from that one, even the brokers charge differently for futures and options.

Explains the underlying reasons for options' popularity, citing lower trading costs and taxation differences, which is crucial for understanding volume trends.

Asked by Shalini Gupta

Participation in electricity derivatives, especially from DISCOMs Partial
See, 50% plus is coming from clients. Of that, I think we really wouldn't be able to say whether it's coming from what kind of participant, DISCOM and so on. But I think we do expect the public sector to take more time to come on Board. The early participation will come from private sector generators, and we are actively engaged with all of them.

Clarifies the current participant mix in electricity futures and provides an expectation for public sector (DISCOM) involvement over time.

Asked by Lavanya Tottala

2 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Highlights

Multi Commodity Exchange reported a strong Q1 FY26, achieving its highest-ever consolidated income of ₹406 crores, representing a 60% year-on-year growth. Profit After Tax (PAT) for the quarter stood at ₹203 crores. The average daily turnover (ADT) reached a robust ₹3,10,000 crores (₹3 trillion), indicating healthy market activity and participation. This performance underscores significant growth and adaptability in a dynamic market environment.

New Product Launches and Innovation

MCX successfully launched a series of new products across various segments during Q1 FY26. These include 10-gram gold futures and options on silver products in the bullion segment. The much-anticipated electricity futures were also introduced, alongside cardamom futures in the agri sector. These innovations aim to broaden risk management tools for stakeholders across diverse industries and enhance market depth.

Technology and Risk Management Focus

The company remains highly focused on strengthening its technology and risk framework to support growth. While a database anomaly caused a delay in trading commencement on one day, it was promptly corrected, and management expressed confidence in non-recurrence. Investments in technology will continue, with an emphasis on efficiency, to ensure the platform can support the expanding product portfolio and increasing market participation.

Regulatory Engagement and Market Development

MCX continues to work closely with regulators, members, and associations to further develop the commodity market in India, enhancing price discovery and benchmarking. The Board also approved a 1:5 stock split, reducing the face value from ₹10 to ₹2 per share, with the objective of making the stock more affordable and accessible to a broader range of investors, subject to regulatory approvals.

Financial Performance Details and Outlook

The reported EBITDA margin for the quarter was around 65%. Management indicated that this margin could face 'a little under pressure' in the coming quarters due to weaker volumes observed in July. Employee expenses and regulatory fees (SGF) were higher, partly due to Q1 over Q4 impact and necessary investments for growth. The effective tax rate for MCX is approximately 20.72%, benefiting from tax-deductible contributions by its subsidiary, MCXCCL.

Electricity Futures: Strategic Launch and Early Traction

The launch of electricity futures is considered a significant new product space, tapping into a large Indian market with a stable spot exchange mechanism. Early indications are positive, with a healthy open interest of about 700 lots. Management reported strong feedback from corporates, with nearly 50% of current participation coming from industrial organizations, highlighting the product's relevance for hedging energy costs.

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