UBS upgrades MCX to Buy with Rs 3,800 target price: Can it boost the stock?

Global brokerage UBS upgraded Multi Commodity Exchange of India (MCX) to a Buy rating from Neutral, raising its 12-month price target to Rs 3,800 from Rs 3,600. The upgrade follows a recent 15% price correction from its May peak, which UBS noted leaves the stock trading at an attractive valuation of 40x 12-month forward price-to-earning, a discount of more than 10% to its three-year average.

Given this strong valuation support, resilient volumes, and positive regulatory developments, the global brokerage raised its earnings per share estimates for MCX by 4%, 8%, and 9% for FY27, FY28, and FY29, respectively. The revised price target implies an upside potential of over 28% from its previous closing price of Rs 2,962, based on a 44x September 2028 estimated PE.

According to UBS, key regulatory developments serve as important medium-term growth catalysts for the exchange. Sebi’s recent consultation paper proposing Foreign Portfolio Investment (FPI) participation in physically settled non-agricultural commodity derivatives and index derivatives is expected to structurally deepen the commodity market.

Furthermore, continued volatility in key commodities driven by geopolitical issues in the Middle East is expected to support near-term volume trends.

MCX’s Q1 FY27 financials

UBS highlighted that MCX posted strong performance in Q1 FY27, with revenue surging 88% year-on-year to Rs 7 billion. This top-line expansion was supported by a 47% YoY increase in Futures average daily turnover to Rs 10.5 trillion and a 266% YoY surge in Options notional turnover.

Although performance moderated sequentially from the peak seen in Q4 FY26, underlying market participation remained healthy, with traded clients doubling year-on-year to 1.37 million.
UBS forecasts average daily transaction fee revenue of Rs 98 crore and Rs 118 crore for FY27 and FY28, respectively, and expects EBITDA margins to expand to 77% in FY28 driven by operating leverage.

MCX share price

MCX shares were trading at Rs 2,980 on Thursday, up 0.61%. The stock has gained over 12% in a week and nearly 7% in a month, being overall up nearly 35% in 2026 so far.

In the longer term, MCX shares have delivered strong returns, surging nearly 78% in a year, over 840% in three years, and more than 880% in five years.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)