Multi Commodity Exchange of India Ltd: Risk Reward Update

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Multi Commodity Exchange of India Ltd: Risk Reward Update

UpdateM

RiskRisk RewardReward– Multi -CommodityMulti CommodityExchange of India LtdExchange(MCEI.NS) of India Ltd

(MCEI.NS)Strong ADTR momentum, earnings benefit from geopolitical volatility

PRICE TARGET Rs3,665.00 OVERWEIGHT THESIS

Probability-weighted 65% base, 5% bear and 30% bull. Skew reflects potentially higher ▪Average daily transaction revenue grew

exchange volumes. sharply in F4Q26, reflecting strong action in

Base case value derived by applying a target P/E of 40x to our Mar-28 EPS estimate. We commodity prices. We build in an ADTR of

expect the stock to trade at a ~20% premium to its mean one-year forward normalized P/E Rs109mn in F27 and Rs120mn in F28. These

since listing in F2012, reflecting strong ADTR in recent months. Due to its asset-light are 26% and 18% lower than its Jan-26 peak

business model, we consider P/E to be the most appropriate valuation metric. and 14% and 5% lower than its 4QF26 ADTR

respectively. Rs2,908.08 ▪Valuation is not cheap. However, theConsensus Price Target Distribution Rs1,800.00 Rs3,800.00 business model benefits from elevated MS PT

geopolitical uncertainty as exchangeSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

volumes rise with heightened volatility in

commodity prices. This makes the stock

defensive with strong EPS growth visibility

RISK REWARD CHART for F27 amid an uncertain macro

environment.

Rs5,585.00Rs5,585.00(+76.91%)Rs5,585.00(+76.91%)(+76.91%)

INR

Consensus Rating Distribution

4800 75% Overweight

17% Equal-weight

8% Underweight

3600 Rs3,665.00Rs3,665.00(+16.09%)Rs3,665.00(+16.09%)(+16.09%)

MS Rating

Rs3,156.90Rs3,156.90Rs3,156.90

Source: Refinitiv, Morgan Stanley Research

Risk Reward Themes