Traders work on the trading floor of the Multi Commodity Exchange of India in Mumbai, India (Photographer: Amit Bhargava/Bloomberg News)

MCX India Says Higher Yields, Good Returns On Mutual Funds Helped In Q3

Multi Commodity Exchange of India Ltd. said the income from higher yields and returns on mutual fund portfolios boosted its December-quarter financials.

“We have a mutual fund portfolio of more than Rs 700 crore. Overall, the yields on our portfolio [have] really been very positive,” Mrugank Paranjape, managing director and chief executive officer at India’s biggest commodity exchange, told BloombergQuint. “That, along with mark-to-market gains in the last quarter of about Rs 2 crore has given us an overall [other] income of about Rs 32 crore.”

Paranjape said the company lowered the tenure of its mutual fund portfolios, which means it doesn’t have any long-dated instruments invested. This, according to him, may have also aided the third-quarter numbers.

The company has been making profits consistently from its crude and gold options, Paranjape said, adding there are some timely constraints such as lack of open interest positions and volume building in the mentha oil market—a part of MCX’s agricultural commodities segment.

The exchange is also looking to tap new market in the fields of energy and agriculture, but the product launch will only happen at the start of next financial year.

Q3 Earnings Highlights (Year-On-Year)

  • Net revenue jumps to Rs 76.9 crore versus Rs 62.8 crore.
  • Net profit more than doubles to Rs 42 crore from Rs 18.8 crore.
  • Margin expands to 27.2 percent from 24.5 percent.
  • Other income rises to Rs 32.2 crore from Rs 13.7 crore.

Also read: Allowing Foreign Investors Can Help India Set Global Commodity Prices, Says MCX’s Mrugank Paranjape

Watch the full interview here: