Buy Multi Commodity Exchange of India, target price Rs 1970: Motilal Oswal

Motilal Oswal has buy call on Multi Commodity Exchange of India with a target price of Rs 1970. The current market price of Multi Commodity Exchange of India Ltd. is Rs 1492.

Multi Commodity Exchange of India Ltd., incorporated in the year 2002, is a Mid Cap company (having a market cap of Rs 7668.62 Crore) operating in Financial Services sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 125.67 Crore, down -8.62 % from last quarter Total Income of Rs 137.52 Crore and up 11.47 % from last year same quarter Total Income of Rs 112.74 Crore. Company reported net profit after tax of Rs 71.73 Crore in latest quarter.

Investment Rationale
The brokerage continues to like the company for its near-monopoly in the Commodities Exchange (97% market share) segment in India. It values the company at a 10-year average multiple of 32x FY23E EPS. Its TP of INR1,970/share implies an upside of 30%.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of June 30, 2020, while FIIs held 38.8 per cent, DIIs 38.7 per cent and public and others 22.5 per cent.