Release Date: July 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MCX's consolidated income increased by 27% to INR 253 crores from INR 199 crores in the previous quarter.
- Operating income rose by 29% to INR 234 crores from INR 181 crores in the previous quarter.
- Average daily turnover (ADT) of commodity futures increased by 48% to INR 25,985 crores.
- MCX achieved its highest single-day turnover of INR 3.77 lakh crores on May 15, 2024.
- The number of traded clients in futures and options (F&O) grew by 6.4% quarter-on-quarter, reaching 5.67 lakhs.
Negative Points
- Regulatory changes, such as SEBI's directive to redesign the charge structure, may impact revenue.
- Uncertainty around the exact financial impact of passing on interest benefits to members as per SEBI regulations.
- Ongoing discussions and lack of clarity on increasing lot sizes for futures and options.
- Delay in the launch of new products like gold 10-gram futures and agri contracts due to system testing.
- Voluntary contributions to the Settlement Guarantee Fund (SGF) may impact short-term profitability.
Q & A Highlights
Q: You mentioned that the slab-wise structure is going away in October. How are we planning to charge, and what portion of the clearing corporation's funds do we have to pass on to members?
A: The current slab is between INR 175 and INR 260. SEBI has mandated a uniform charge structure, and we are still studying this. Regarding the clearing corporation's revenue, it's still under discussion. We don't have exact numbers yet, but it will be an important area to handle.
Q: Can you provide some clarity on the product pipeline, especially the crude monthly series contract and index options?
A: We have certain approvals in place and are in the process of seeking more. As and when we get approvals, we will issue circulars to the market. The cotton candy contract has been amended and launched, and we are hopeful to launch other products soon.
Q: In terms of IT costs, you mentioned premium charges for the first year of the platform launch. Can you quantify the premium costs out of the INR 23 crores IT cost?
A: We may not be able to disclose such breakups of services. These are not permanent services, and quantification would be difficult to predict or present here.
Q: Could you provide the average cash collateral for FY24?
A: The margin money available with CCL on March 31, 2024, was around INR 917 crores. We will get back to you with a detailed breakdown.
Q: Why are we making voluntary contributions to the SGF?
A: SGF is critical for our risk management process. As our volumes and open interest grow, we need to strengthen the SGF to handle contingencies. This is a proactive measure to ensure stability.
Q: Can you give the transaction income breakup into futures and options?
A: Future income is INR 71 crores, and options income is INR 127 crores.
Q: What is the reason for the recent increase in future volumes?
A: There has been increased traction due to more participation from the industry and interest in various segments like bullion, energy, and base metals. It's a secular all-around growth in futures.
Q: Can you provide an update on the gas exchange part of the business?
A: MCX does not have a subsidiary or associate on natural gas. You might be referring to IEX's gas exchange.
Q: What is the status of the new product launches, including the 10-gram gold contract?
A: We are hopeful to launch the gold 10-gram contract and two agri contracts (cotton seed wash oil and crude sunflower oil) soon. The delay was due to thorough testing on the new platform.
Q: How do you see index options as a category in terms of future contribution?
A: Index options are expected to be a good product, but they have certain limitations. We are looking into this and will proceed after regulatory approvals and system testing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
