MCX shares surge 9% on robust Q2 results; Morgan Stanley raises price target

Shares of Multicommodity Exchange of India (MCX) gained 9 percent on Wednesday on robust Q2 results. The sentiment was also bullish after global brokerage Morgan Stanley raised the stock's target and said that it expects the price to double in three years.

The stock rose as much as 8.9 percent to its 52-week high of Rs 1,107.70 per share on the BSE. At 10:05 am, the stock was trading 5 percent higher at Rs 1,069 as compared to a 0.2 percent or 80 points rise in the BSE Sensex at 38,586.

The company on Tuesday reported over two-fold jump in net profit at Rs 71.75 crore for Q2 versus Rs 35.93 crore in the year-ago period. Its total income increased 55 percent to Rs 144.53 crore in Q2 from Rs 93.27 crore in the same period last year.

Morgan Stanley raised its target price for the stock to Rs 1,365 per share from Rs 1,260 earlier on higher fee realisation and lower operating costs. The brokerage maintained its 'overweight' rating.

The brokerage also raised the stock's EPS estimates by 14 percent, 6 percent, and 10 percent for FY20, FY21, and FY22, respectively.

The company's average daily turnover trade in commodity futures on the exchange increased 40 percent to Rs 34,526 crore in Q2 FY20 from Rs 24,655 crore in the corresponding quarter of 2018-19.