Shares of Multi Commodity Exchange of India (MCX) fell nearly 4% in early trade on Friday after global brokerage UBS downgraded the stock to Neutral, citing limited upside following the sharp rally seen this year.
The stock was trading at ₹3,036.60 on the NSE at around 9:46 AM, down 3.86% from its previous close of ₹3,158.50. MCX touched an intraday low of ₹3,023 during the session.
UBS downgraded MCX from Buy to Neutral while raising its target price to ₹3,600 from ₹3,200. Despite the higher target price, the brokerage believes the stock’s strong earnings momentum and robust trading volumes are largely reflected in current valuations.
According to UBS, elevated volatility across key commodities in recent months has supported trading activity on the exchange. The brokerage noted that Q1FY27-to-date volumes remain healthy, although they have normalised compared with the exceptionally strong levels seen during the fourth quarter.
The brokerage also said it is not concerned about competitive pressures at this stage, suggesting MCX continues to maintain its dominant position in the commodity derivatives market.
However, UBS believes peak earnings momentum may now be behind the company. The brokerage highlighted that MCX is currently trading at around 50 times one-year forward earnings, roughly 10% above its historical average valuation multiple.
While the exchange continues to benefit from strong participation in commodity markets and healthy volume trends, UBS sees limited room for further re-rating from current levels and believes much of the positive outlook has already been priced into the stock.
MCX has been one of the strongest-performing capital market stocks this year, with the share price gaining more than 43% on a year-to-date basis before Friday’s decline. The stock recently touched a 52-week high of ₹3,480.
Meanwhile, MCX shares were trading 3.86% lower at ₹3,036.60 on the NSE at the time of publishing this article, compared with the previous close of ₹3,158.50.
Disclaimer: The views and recommendations expressed above are those of the brokerage and not of the publication. This article is for informational purposes only and should not be construed as investment advice. Investors should consult qualified financial advisers before making investment decisions.