MCX Q2 Review - Volume Dip Impacted By Bullion: Motilal Oswal

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Motilal Oswal Report

Multi Commodity Exchange of India Ltd.'s overall futures average daily turnover dipped by 8% QoQ, leading to a 5% sequential decline in revenue.

Ebit margin dipped by 170 basis points QoQ, led by negative operating leverage.

Q2 FY22 saw further normalisation in bullion volumes, largely driven by a 51%/64% YoY decline in gold/silver volumes. This was offset by a strong surge in aluminum and crude oil volumes.

The impact on volumes in Q2 FY22 was the result of some normalisation in bullion volumes and the fourth phase of implementation of new margin rules (100% of peak margin requirement) from September 01, 2021.

MCX's management highlighted that it is seeing a recovery in volumes in October 2021. This gives us the confidence that the new margin rules would gradually be accommodated by participants.

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