MCX India - Weak 4QFY13 but larger issues at play - Kotak

MCX reported 4QFY13 EBITDA at Rs697 mn (-6% yoy), marginally below expectation. The negative variance was led by sharp increase in overheads (+23% yoy, +22% qoq). Balance sheet continued to remain strong with ~Rs10 bn net cash. Larger issues at play: (1) CTT (negative but quantum of impact yet eludes), (2) weakening commodity cycle (negative), (3) rising price volatility (historic lows in FY2013), (4) potential positive regulatory changes (FCRA Amendment Bill) and (5) strong growth in MCX-SX currency segment (value discovery in FY2013).

Retain ADD with FY2014E fair value of Rs990; Rs12/share interim dividend and Rs24/share final dividend (~2.7% yield, ~50% payout).

Source : Equity Bulls

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