MCX Stock Research 2018

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MCX Overview

MCX stands for Multi Commodity Exchange of India. It is first listed exchange of India. It is the pioneer Commodity exchange of India. As per the website MCX

  • Launched first-ever Gold Options contract on futures in India
  • Launched first-ever Brass futures contract in the world
  • It is first listed exchange of India.

It has recently launched the Options contract as well. The launch of Options contract in quite a few commodities will help increase the trade volume and profitability of the exchange.

Note NSE has major revenue from the Futures and Options only. The traditional Cash trading does not add much to the profitability of exchanges. MCX has a monopoly in Commodity exchange area.

So if you are looking for company with monopoly and moat then you MCX is one good candidate you should look into. Below we will share the price graph with you.

MCX Share Price Performance

Below is share price performance of Multi Commodity Exchange or MCX. The share price is taken from inception like from IPO till date. So it will give you good idea whether it has made money for investors or not.

MCX Share Price Performance 2018
MCX Share Price Performance 2018

MCX made debut on exchanges at price of around 1200. It then moved down to 1000 odd levels and jumped from that level to 1,500 odd levels in year 2013.

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But since then the stock has not moved above 1,500 levels. It made the lowest point in year 2013 mid. From that point it has moved up but never crossed the all time year it made just after IPO.

One good thing about the company i regular dividend it pays to the investors. The dividend is healthy and at current price it is over 2% which is good by any standard.

People who have invested at right levels have made money in this company along with good yearly dividend returns but for IPO investors the company has not given positive returns over the years.

MCX My Opinion

Multi Commodity Exchange or MCX is an unique company in many sense as mentioned in the overview section. NSE and BSE deal with Equities and MCX deals with Commodities.

There has been news of MCX and NSE merger. Whether that becomes a reality or not is other question. NSE is also planning to get listed on BSE. MCX and NSE merger will be a positive news for the counter.

The recent launches of Options trading in many commodity will increase the revenue and profitability of the companies. This may unlock value of the company and can propel the share price past the all time high.

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It is good to track the company and include it in your stock watch list. That way you can track the news and price of the company. Note Rakesh Jhunjhunwala has invested in the company. This also gives you comfort to some extent.

Conclusion

MCX satisfies come key points of Fundamental analysis of stocks. It has monopoly business area, there is scope for growth as many people still do not trade in Commodities. Indian market is yet to have good penetration in Equities forget the Commodity part.

So there is prospect of growth in future and the only company in position to leverage or get benefit from that growth in MCX. This makes it good candidate for further evaluation and tracking.


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