India’s dominant commodity exchange delivers robust quarter with revenue and profit more than doubling, as options trading and bullion contracts drive unprecedented growth
The Multi Commodity Exchange of India (MCX) is riding a powerful wave of trading activity, with the country’s leading commodity platform posting numbers that have left analysts impressed—if not entirely convinced about sustainability. The exchange’s third-quarter performance has prompted both Motilal Oswal and HDFC Securities to raise their earnings forecasts, though views on valuation remain mixed.
Breaking Records Across the Board
MCX’s third-quarter performance reads like a dream run. The exchange posted operating revenue of Rs 6.7 billion for the December quarter, surging 121% from the same period last year and 78% from the previous quarter. For the nine months ending December 2025, revenue climbed 72% year-on-year to Rs 14.1 billion.
“MCX delivered a robust quarter, with revenue/EBITDA rising 78/103% QoQ and 121/156% YoY, respectively,” HDFC Securities noted in its report, highlighting the exchange’s strong execution. “The robust performance was led by a ~71% jump in options revenue and nearly 2x sequential jump in futures revenue.”
Net profit for the quarter reached approximately Rs 4 billion, rising 2.5 times year-on-year and nearly doubling sequentially, while nine-month profit stood at Rs 8 billion, up 89%. The exchange’s profitability has expanded alongside revenues, with the cost-to-income ratio improving to 25.6% from 35.9% a year ago.
Options Trading Takes Center Stage
The real star of the show? Options trading, which now accounts for nearly two-thirds of the exchange’s transaction fees. According to Motilal Oswal, “Overall ADT (Average Daily Turnover) was up 3.3x YoY to Rs 7.9 trillion, largely driven by 221%/207% YoY growth in Options Notional ADT/Futures ADT.”
HDFC Securities provided additional granular detail: “Options notional/premium ADTV stood at Rs 6,657/71.04bn and options contributed ~62.6% to transaction revenue. Crude/natural gas/bullion contributed 22/10/68% to options notional and 33/25/42% to premium.”
The exchange’s EBITDA margin expanded dramatically to 74.4%, up from 65.1% in the previous quarter and 64.1% a year ago. HDFC Securities attributed this to “embedded non-linearity,” noting that “future cost increases (investments) will be gradual.”
Bullion and Natural Gas Drive Explosive Growth
The surge in trading activity wasn’t uniform across commodities. Gold and silver contracts saw spectacular growth, with bullion options volumes skyrocketing 987% year-on-year, according to Motilal Oswal.
HDFC Securities added that “volumes surged in bullion contracts, with notional ADTV up 123% QoQ and premium ADTV up 215% QoQ, supported by higher P/N ratio (higher volatility). Bullion contracts contributed 67% to notional and 42% to total premium ADTV, driving a favourable volume mix.”
According to Motilal Oswal, “Options premium ADT rose 97% YoY to ~Rs 71 billion, with a 959%/23% YoY rise in bullion and energy contracts.” This explosive growth in bullion trading came as gold prices hit record highs amid global economic uncertainty, drawing both retail and institutional participation.
Even base metals, traditionally a quieter segment, came alive in the recent quarter. Volumes jumped 156% sequentially and 77% year-on-year, driven by what management described as warehouse consolidation and simplified contract structures.
Momentum Continues Into January
Perhaps most encouraging for bulls: the momentum hasn’t stopped. HDFC Securities reported that “volumes have remained elevated in Jan’26, with premium ADTV at ~Rs 101bn vs Rs 71bn in Q3FY26,” suggesting the strong performance is carrying forward into the current quarter.
However, the brokerage added a note of caution: “though we expect normalization as current levels reflect heightened commodity volatility.”
Building the User Base
MCX’s client metrics paint a picture of steady expansion. The exchange ended December with 40 million Unique Client Codes (UCCs), up from 31.3 million a year ago and 36.7 million in September. Active clients in the quarter stood at 0.9 million in options and 0.4 million in futures.
Management attributed the sequential 10% increase in UCCs to “better alignment of user experience across equity and commodity platforms; adoption of common ledger/front-end experience by members; and onboarding of new members,” as quoted in the Motilal Oswal report.
HDFC Securities identified additional growth drivers: “Key volume drivers include an increase in traded UCCs (aided by discount brokers), heightened volatility across commodities, launch of metal options, regulatory tailwinds supporting institutional participation, and rising traction in index options (bullion and metals).”
The exchange maintains its stranglehold on India’s commodity futures market, with a market share exceeding 99% as of December 2025, split between precious metals (79%), energy (15%), and base metals (6%).
Expenses Rise, But Profitability Intact
While revenues soared, expenses also climbed, though at a slower pace. Total costs jumped 58% year-on-year to Rs 1.7 billion, with staff costs rising 34% and other expenses up 68%. The increase in other expenses was primarily driven by higher software charges, computer technology costs, and contributions to the Settlement Guarantee Fund (SGF).
Motilal Oswal noted that “SGF contributions are made in accordance with SEBI-prescribed norms. A strong SGF provides flexibility in managing margins and enhances settlement safety.”
Product Pipeline Takes Backseat to Stabilization
MCX recently launched monthly options contracts on its bullion index in October 2025, covering both gold and silver. However, the exchange appears to be taking a measured approach to future product rollouts.
As Motilal Oswal stated, “Management indicated that while the product pipeline remains healthy, the near-term focus is on stabilising recently launched contracts, with future launches to be timed based on internal readiness, market appetite, and regulatory processes.”
Divergent Views on Sustainability
Here’s where analyst opinions begin to diverge. Both brokerages raised their earnings estimates, but with different assumptions about volume normalization.
Motilal Oswal expects a sharper pullback. “Considering the recent spurt in price volatility, we expect commodity volumes to normalize, assuming flat volumes in Jan’26, followed by a 20% decline in Feb’26,” the analysts wrote, projecting a gradual recovery with roughly 3% monthly growth in March and 1% thereafter. Motilal raised earnings estimates for fiscal years 2026, 2027, and 2028 by 9%, 22%, and 24% respectively, but maintained a ‘Neutral’ rating with a target price of Rs 2,750—representing 14% upside from the current market price of Rs 2,418.
HDFC Securities’ view. “We assume FY27E futures and options ADTV to be ~15% and 2% lower than Q3 levels, yet we raise FY27/28E EPS estimates by ~14/8%,” the brokerage stated, maintaining a ‘Buy’ rating with a target price of Rs 2,780, based on 46 times FY28 estimated core profit plus net cash excluding SGF.
