
Analyst sees 50% upside ahead as MCX hits record high
The Multi Commodity Exchange (MCX), India’s largest commodity exchange, has reached a record high after UBS raised its target price to ₹10,000. The surge in MCX’s stock price has led to a flurry of activity among investors, with many wondering what’s behind the sudden jump. One analyst, Palak Jain, has shed light on the factors driving the growth and is predicting further upside in the coming months.
MCX surged 6% to a record high of ₹9,114 on Wednesday, prompting UBS to raise its target price to ₹10,000. This upward revision has been attributed to the exchange’s strong Q4 profit growth, which has exceeded expectations. However, Palak Jain, an analyst at RA Securities, believes that there are more factors at play that will drive the stock even higher.
In a note to clients, Jain highlighted three key reasons why she sees 50% upside ahead for MCX. Firstly, she pointed to the exchange’s breakout above a key resistance level. MCX had been trading range-bound for several months, with the stock price stuck between ₹7,500 and ₹8,500. However, the recent surge has seen the exchange break above this resistance level, indicating a potential new leg of growth.
Secondly, Jain cited strong Q4 profit growth as a key driver of the stock’s upward momentum. MCX has reported a significant increase in profit margins in the past quarter, driven by higher volumes and a reduction in operating costs. This has led to a significant increase in the exchange’s profitability, which is expected to continue in the coming quarters.
Finally, Jain highlighted the launch of electricity derivatives as a key catalyst for growth. MCX recently launched electricity derivatives, which are expected to be a major growth driver for the exchange. The derivatives market has been growing rapidly in recent years, driven by the increasing importance of renewable energy and the need for companies to manage their energy risks.
In addition to these factors, Jain also pointed to strong support levels at ₹8,200-8,300, which she believes will act as a floor for the stock in the coming months. This means that even if the stock experiences a pullback, it is likely to find support at these levels and bounce back up.
Based on these factors, Jain is predicting a significant upside for MCX in the coming months. She has set a target price range of ₹11,145-12,830 in the next three months, representing a potential upside of 24-40% from the current levels.
MCX’s recent surge has been met with enthusiasm from investors, who are betting on the exchange’s continued growth. The recent launch of electricity derivatives has provided a significant growth driver, and the strong Q4 profit growth has reinforced investor confidence.
However, not everyone is convinced. Some analysts have raised concerns about the sustainability of MCX’s growth, particularly in light of the ongoing downturn in the global commodity market. Others have pointed to the exchange’s high valuation, which may make it vulnerable to a correction if the market turns south.
Despite these concerns, Jain is confident that MCX has the potential to continue its upward momentum. She believes that the exchange’s strong fundamentals, including its growing derivatives market and increasing profitability, will drive the stock higher in the coming months.
In conclusion, MCX’s recent surge to a record high has sparked excitement among investors, with many wondering what’s behind the sudden jump. One analyst, Palak Jain, has shed light on the factors driving the growth and is predicting further upside in the coming months. With strong Q4 profit growth, a breakout above resistance, and the launch of electricity derivatives, Jain believes that MCX has the potential to continue its upward momentum and reach new highs.