Scaling new heights
MCX continues to deliver a compelling growth story, powered by new product launches, a stable technology platform, regulatory tailwinds, and rising commodity participation—further amplified by elevated volatility and discount broker integration. As highlighted in our June 2025 report, bullion has risen as a major contributor to options trading, previously dominated by energy contracts; this shift unfolded over the last three quarters, with bullion contribution at ~57%/30% of options notional/premium ADTV in Q4FY26, a sharp jump from 25%/9% in Q4FY25. Options premium ADTV accelerated further in Q4 from a higher Q3 base, climbing to ~INR 106bn from INR 71bn, propelled by a robust +89% QoQ rebound in energy contracts and ~14% QoQ growth in bullion after it more than tripled in Q3. The Q4 crude volume surge tied directly to spiking volatility, which hit 3.7% in March 2026 (vs 1.3% YoY)— the highest in four years, with a ~90% correlation to the P/N ratio. We don’t anticipate sustained elevated volatility, so we have normalized volume expectations, penciling in Q4FY27E premium ADTV at INR 75bn, ~45% below the March 2026 levels (INR 136bn).
MCX’s options portfolio is now well-diversified, with gold and silver contracts contributing ~30% of options ADTV alongside established crude and natural gas contracts. The options premium base has shifted from INR 35-45bn to INR 70-80bn even in a normalized environment; spikes in global volatility can push premiums to the INR 130-150bn band, though it eventually settles back to the new base. The expiry distribution further supports this reset — crude and energy contracts expire in the first half of the month, while gold and silver expire at the end — helping maintain steady volumes throughout. Options active UCCs rose 62% YoY to 0.89mn in Q3 from 0.55mn, signalling broader participation fuelled by discount brokers. Despite this surge in participation, MCX still trails equity exchanges which have ~4-5mn active investors in equity options. We expect notional/premium volume to register a +56/42% CAGR over FY25-28E. We raise our revenue and EPS estimates by 7-13% to reflect the Q4 uptick but trim the multiple to 43x (from 46x earlier) amid near-term volume uncertainty. We maintain BUY with a TP of INR 2,950, based on 43x FY28E core EPS plus cash (ex-SGF and trading margin).
