Are MCX Stocks Too Expensive After Doubling Money in Just 1 Year? A CME case study explains

Shares of the Multi Commodity Exchange of India have gone multibagger in the past year, rising more than 100% on an unprecedented rise in precious metal prices.In 2025, silver rose 170%, while gold rose more than 60%. The momentum spilled over into 2026, with silver rising over 70% in the first two months before correcting sharply, falling 42% from the January 29 record high of Rs 4.20 lakh. Gold has also cooled and is down 20% from its peak of Rs 1.93 lakh.

The sharp turnaround led to higher margin requirements aimed at curbing volatility. After almost a month of turbulence and wide price swings, MCX and NSE have withdrawn the additional margins of 7% and 3% respectively on silver and gold contracts from February 19. The easing eased sentiment, leading MCX shares to rise as much as x% on the BSE today.But after a 113% rise, the most important question is: is the stock ahead of fundamentals?

During FY21, when crude oil prices turned negative due to the Covid shock, MCX sharply increased margin requirements on crude futures. The immediate impact was visible in the volumes. Average daily turnover (ADTV) in crude futures fell from Rs 17,200 crore in February 2020 to Rs 3,300 crore in April 2020.

The raw options premium, ADTV, rose as volatility increased. Premium turnover as a share of notional turnover increased from 2.2% in February 2020 to 3.9% in March 2020 and further to 8.3% in April 2020. In the following years, participation structurally shifted towards options. The premium ADTV for crude options grew from around Rs 5.5 crore in FY21 to Rs 2,120 crore in FY25 and around Rs 2,400 crore in FY26 so far.

Since the beginning of February 2026, the gold price has fallen by about 10%, while the silver price has fallen by about 33%. In response, average margin requirements for silver futures increased from 15% previously to 72% in February 2026. For gold futures, margins increased from 10% to 30%. The result was a sharp contraction in futures activity. Gold futures ADTV fell 41% month-on-month to Rs 33,600 crore in February 2026 so far, while silver futures ADTV fell 58% to Rs 22,700 crore in the same period. But reflecting the rough patch of 2020, options activity has picked up again. Premium sales as a percentage of total gold and silver options sales increased in late January and February 2026, indicating a shift in trader preference rather than an outright decline in participation.

Is the multiple really stretched?

The CME (Chicago Mercantile Exchange) is the world’s largest commodity derivatives exchange on an open interest basis. According to ICICI Securities, CME witnessed exponential growth in volumes between 2004 and 2007. Options contracts traded increased from 48 million in CY04 to 107 million in CY07. Futures contracts doubled from 211 million to 432 million in the same period.

The increase in activity was accompanied by a sharp reappraisal. CME’s price-to-earnings ratio rose from 24.62x in January 2004 to a peak of 49.31x in November 2006. Notably, the stock traded above 40x forward earnings for 24 months between September 2005 and August 2008.

Outlook

The domestic brokerage has an Add rating and a target price of Rs 2,780 per share. That implies an upside potential of 19% from current levels. The average daily traded volume (ADTV) of MCX’s futures stood at Rs 55,800 crore for 9MFY26 and Rs 1,09,700 crore for January FY26 to date. Based on the current trend, future ADTV is projected at Rs 66,500 crore in FY26E, rising to Rs 80,000 crore in FY27E and Rs 90,000 crore in FY28E. These estimates imply a run rate of Rs 98,700 crore in the remaining three months of FY26.

In the options segment, the option premium ADTV, at the prevailing run rate, is estimated at Rs 6,200 crore in FY26, Rs 8,100 crore in FY27 and Rs 9,500 crore in FY28, which amounts to Rs 9,200 crore in the last quarter of FY26.

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