MCX Q3 net profit falls 35.61% to Rs 18.77 crore

The company's operating costs remained at the Q2 level despite launch of a new options contract

MCX’s total income decreased 16.41% to Rs 76.52 crore from Rs 91.54 crore over the previous quarter. Representational image. Image source: Pixabay

Leading commodity exchange MCX today posted a 35.61% fall in consolidated net profit at Rs 18.77 crore for the December quarter over the previous quarter ended September 30, 2017, on lower volumes in the bullion segment.

In the previous quarter, the exchange had reported a net profit of Rs 29.15 crore. The company had posted a net profit of Rs 34.04 crore in the same quarter last year, it said in a BSE filing.

For the quarter ended December, MCX’s total income decreased 16.41% to Rs 76.52 crore from Rs 91.54 crore over the previous quarter while the operating revenue decreased by 9.36% to Rs 60.97 crore.

Other income comprising treasury revenue fell by 35.95% to Rs 15.55 crore on account of steep rise in bond yields, impacting the investment income, the company said in a statement.

The EBITDA margin was 37.99% and PAT margin was 24.53%.

For the nine months ended December 31, 2017, the total income stood at Rs 255.29 crore against Rs 289.38 crore during the corresponding period in FY 2016-17.

Net profit for the nine months decreased 29.15% to Rs 74.22 crore.
The average daily turnover (ADT) in commodity futures also decreased 3.7% to Rs 20,229 crore.

MCX Managing Director and Chief Executive Officer Mrugank Paranjape said, "The quarter witnessed mixed performance across product segments."

Contrary to historical trend, metals segments had seen an increase in volumes over Q2. However, low volatility in gold prices during the quarter led to a decrease in bullion volumes by 29% over the previous quarter, he said.

The rise in bond yields affected investment gains, resulting in a fall in investment income.

"In the last quarter, we had a successful launch of our options contract on Gold Futures. The market went through the complete settlement cycle including devolvement without any glitches. This paves the way for us to seek regulatory approvals on more Options contracts. We continue to engage with the regulators and the market participants to increase the liquidity in this product.”

“As committed, the company continued to exercise control over the operating costs which remained at same levels as previous quarter, after factoring in expenses incurred towards launch of options and other member engagement activities,” Paranjape said.

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