Multi Commodity Exchange of India Limited — Q4 FY26

Multi Commodity Exchange Of India Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=VYni659DGKE Published: 2 days ago

0:00 Ladies and gentlemen, good day and welcome to the Multicommodity Exchange of India Limited Q4 FY26 earnings conference call. 0:09 9 seconds Joining us on the call are Miss Praina Ray, managing director and chief executive officer, MCX, 0:17 17 seconds Mr. Rishi Natani, managing director and chief executive officer, Multicommodity Exchange Pairing Corporation Limited, 0:25 25 seconds Mr. Mr. Chandesh Sha, Chief Financial Officer, MCX, and Mr. Manoj Jen, Chief Operating Officer, MCX. 0:34 34 seconds As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation 0:42 42 seconds concludes. Should you need assistance during this conference call, please signal an operator by pressing star and then zero on your Touchstone phone. 0:51 51 seconds Please note that this conference is being recorded. I now hand the conference over to Miss Praina Ray, MD 0:58 58 seconds and CEO MCX. Thank you and over to you ma'am. 1:04 1 minute, 4 seconds Thank you very much and uh good evening everybody. It's wonderful to be here. 1:09 1 minute, 9 seconds Warm welcome to all the participants joining us for the call. It's been a good year with good results and I'm very 1:16 1 minute, 16 seconds pleased to report this very exceptional year building strong momentum that we have seen in earlier quarters and we've 1:23 1 minute, 23 seconds had a robust close with the last quarter as well. This performance reflects strength across our volumes the product 1:32 1 minute, 32 seconds innovation as well as market participation and it reinforces the relevance of commodity derivatives in India's financial ecosystem. 1:42 1 minute, 42 seconds Now for this quarter we have delivered 1:53 1 minute, 53 seconds ment in trading activity as well as uh participation across all our segments. 2:01 2 minutes, 1 second During the year, we navigated uh periods of high volatility and challenging market conditions across multiple 2:09 2 minutes, 9 seconds commodities, including potential delivery risks, which were all very strongly, 2:17 2 minutes, 17 seconds rigorously, and effectively managed with minimum disruption to market functioning. In fact, I would say I I call it the one of our highlights of 2:25 2 minutes, 25 seconds last year that we that the market integrity was maintained at the highest level despite a lot of broader economic risks that came our way. 2:37 2 minutes, 37 seconds For the full year FY26, the consolidated revenue from operations more than doubled to 232 crores and this was 2:47 2 minutes, 47 seconds supported by nearly a 2 and a half times increase in the average daily turnover across both futures and options. The 2:55 2 minutes, 55 seconds profit after tax crossed 1,300 crores and EITA at 1,774 crores reflected both 3:04 3 minutes, 4 seconds the scale benefits and the continued cost discipline to strengthen the commodity derivatives 3:13 3 minutes, 13 seconds ecosystem. We've initiated a focus drive price in India hedge in India. This promotes and deepens hedging 3:21 3 minutes, 21 seconds participation within India forme as well as corporate hedggers. 3:29 3 minutes, 29 seconds Institution and retail investors have also increasingly embraced the commodity asset class leading broader and deeper market participation. 3:41 3 minutes, 41 seconds Product development efforts focused on contract innovation and enhanced frameworks contribute to 3:49 3 minutes, 49 seconds leer deeper liquidity as well as wider market access. 3:55 3 minutes, 55 seconds Importantly, the growth we are witnessing is structural along with taking advantage of cyclical tailwinds, 4:04 4 minutes, 4 seconds increasing participation from a diverse set of market participants, improving awareness, acceptance of command 4:12 4 minutes, 12 seconds derivatives, introducing more participants to both the hedging instrument as well as the asset class positions well for sustained expansion. 4:23 4 minutes, 23 seconds Looking forward, we are confident in our strategy, positioned to capitalize the next phase of growth in India's commodity derivative market. As we 4:31 4 minutes, 31 seconds scale, we are focused on the highest standards of governance, risk management, and market integrity. 4:37 4 minutes, 37 seconds Strengthening infrastructure, continuing to invest in our technology, and delivering a seamless sharing 4:45 4 minutes, 45 seconds experience will be top priorities. Our emphasis will be on innovation, liquidity enhancement and long-term value creation for all our stakeholders. 4:55 4 minutes, 55 seconds We thank our regulators, member brokers, participants, our partners and all 5:02 5 minutes, 2 seconds stakeholders including our shareholders for their continued trust and support in MCX. 5:10 5 minutes, 10 seconds So I now conclude my opening remarks and happy to take questions. We have our management team here with us as well. 5:19 5 minutes, 19 seconds Thank you very much. We will now begin with a question and answer session. 5:24 5 minutes, 24 seconds Anyone who wishes to ask a question may press star and then one on their touchstone phone. 5:30 5 minutes, 30 seconds If you wish to remove yourself from the question queue, you may press star and two. 5:36 5 minutes, 36 seconds Participants are requested to use handsets while asking a question. 5:42 5 minutes, 42 seconds Ladies and gentlemen, we will wait for a moment while the GP. 5:56 5 minutes, 56 seconds Our first question comes from the line of Shinik Mata from Indo Alps wealth. Please go ahead. 6:06 6 minutes, 6 seconds Hi, I just wanted to check uh regarding the statement that you made about uh large part of this growth being 6:14 6 minutes, 14 seconds structural and uh what are the factors that you're seeing which is helping you 6:20 6 minutes, 20 seconds to say that uh factor you know we we see clearly bullions really driving most of 6:27 6 minutes, 27 seconds the volumes and the bullion volatility is also driving a lot of this uh picture. If you could throw some lights, it would be fantastic. 6:38 6 minutes, 38 seconds Yeah. So, you know, um our two big drivers of volume are energy and bullion. We've seen growth across both of these. 6:49 6 minutes, 49 seconds Um while of course, Boolean has had a much higher growth and we are very happy about that. It has grown more than four times. 6:57 6 minutes, 57 seconds uh the energy growth has you know also been good and strong over a very high 7:04 7 minutes, 4 seconds base. So this really makes both of them strong constituents um for MCX. 7:11 7 minutes, 11 seconds Now globally and in India you know we see there are certain points in time when the requirement around boolean will 7:20 7 minutes, 20 seconds be stronger and there'll be times when the requirements around energy will be stronger and perhaps times when both are equally important. 7:28 7 minutes, 28 seconds Um so we do see that they both uh you know create that sort of um balancing 7:35 7 minutes, 35 seconds with and alongside each other. Um and this along with the the kind of opportunity in the Indian space uh the 7:44 7 minutes, 44 seconds kind of commodity markets needed to support uh the growth in the country. Um 7:51 7 minutes, 51 seconds the sort of uh early growth stage in which the overall market is of which MCX is a large 8:00 8 minutes participant uh all create that you know structural foundation. 8:05 8 minutes, 5 seconds uh there's still a lot more opportunity uh when it comes to what can be done uh regulatory wise, policy wise etc etc and 8:14 8 minutes, 14 seconds we believe over the years uh that will also play out. So yes there is a cyclical component but there is a deep uh structural component also. 8:25 8 minutes, 25 seconds Okay. So you believe really the momentum is continuing the way you the the trend in the last few months. 8:38 8 minutes, 38 seconds So we believe the coming year will be a strong year. Exactly how each quarter will play out of course we'll we'll wait 8:46 8 minutes, 46 seconds and see how how the numbers are but uh we believe the year will be a strong year. 8:53 8 minutes, 53 seconds All right. Thank you for this. Thank you Sheni. 9:00 9 minutes Thank you ladies and gentlemen. In order to ensure that the management is able to address questions from all the participants in 9:07 9 minutes, 7 seconds the conference, we request you to limit yourselves to two questions per participant and rejoin the queue for any other follow-up questions. 9:16 9 minutes, 16 seconds Our next question comes from the line of D Shagarwal from IFL Capital. Please go ahead. 9:24 9 minutes, 24 seconds Yeah, thank you everyone for the opportunity and firstly congratulations to the entire team for a great set of number. Uh ma'am my first question would 9:32 9 minutes, 32 seconds be there was a consultation paper which talked about uh allowing FBI into gold and silver contracts. So one uh if there 9:40 9 minutes, 40 seconds is any update you can give us and secondly what is the contribution that we have from FBI in the uh energy products that is crude oil and natural gas. 9:53 9 minutes, 53 seconds Hi Dish, thank you very much uh for the wishes. Uh so having SPIs to participate 10:00 10 minutes uh broadly in the commodity space going beyond uh the cash settle segment is uh certainly critical on the agenda. It's 10:08 10 minutes, 8 seconds something that uh there has been a fair amount of debate and consultation. 10:14 10 minutes, 14 seconds As you know there's also the consultant consultation paper that is out there. 10:19 10 minutes, 19 seconds uh we are also contributing uh strongly in it. So we will of course wait for the uh results of this uh paper to come out 10:27 10 minutes, 27 seconds and um you know then we will take it forward from there. Now the SBI 10:34 10 minutes, 34 seconds contribution as you know is primarily in uh the energy segment because it's the cash settle segment. 10:41 10 minutes, 41 seconds Our onboarding of SBI has been strong. Um the pipeline is also strong. 10:49 10 minutes, 49 seconds The contribution currently stands at about 2 to 3% of ADT and uh within the energy segments uh 10:58 10 minutes, 58 seconds they are a significant uh contributor. I I would say that they are in the double digit contribution of energy while at the broader MCX level they will be at 11:07 11 minutes, 7 seconds about a 2 to 3%. And we see this number growing. Um right sir. All right ma'am. And uh 11:16 11 minutes, 16 seconds secondly ma'am uh if hypothetically if you were to say that uh regulator allows collocation in commodities uh in what 11:24 11 minutes, 24 seconds time we'll be able to roll out these services uh to the traders? 11:29 11 minutes, 29 seconds What is the preparedness uh that we have to introduce collocation services? 11:37 11 minutes, 37 seconds Uh if this were to get permitted uh by the regulator, we'll be able to take 11:43 11 minutes, 43 seconds this to market um fairly soon within the kind of market requirements required. 11:52 11 minutes, 52 seconds So we don't think we will have we will not be on the back foot there. 11:57 11 minutes, 57 seconds Understood. The only reason to ask this was because uh the competition already offer collocation services in equities. 12:04 12 minutes, 4 seconds So they are already at it and uh do we also have prepared to kind of introduce it within a month or so. 12:14 12 minutes, 14 seconds Uh yes Dish we do have our uh plans in place and we'll be able to activate them at short notice. Perfect. And I had two accounting. 12:23 12 minutes, 23 seconds Sorry to interrupt. Sorry to interrupt Mr. Aar. 12:26 12 minutes, 26 seconds No worries. No worries. It's okay. Thank you so much. Thank you. 12:31 12 minutes, 31 seconds Your next question comes from the line of Amit Chandra from HTFC Securities. Please go ahead. 12:37 12 minutes, 37 seconds Yeah, thanks for the opportunity and uh my my first question is on the know uh 12:45 12 minutes, 45 seconds know increase in the UCCC that we have seen. So for the full year it's up by 64%. It's very hardening to see this. Uh but uh you know obviously it is know 12:54 12 minutes, 54 seconds because of onboarding of some of the like discount brokers, not discount brokers. So is it fair to assume that uh know uh you know the increase in the I 13:03 13 minutes, 3 seconds know UCCC is in the base or know we can see further more participation in terms of uh more retail clients coming and 13:11 13 minutes, 11 seconds trading onto the commodities because uh we are know in in terms of number of uh people trading we are at 35% of what it 13:20 13 minutes, 20 seconds is there in equities. So and uh know what is driving such a you know steep 13:27 13 minutes, 27 seconds expansion in terms of uh know the people who are trading on the commodities is it only the volatility or you'll be or you 13:34 13 minutes, 34 seconds see some active participation uh know across uh or or it is more like broad-based. 13:41 13 minutes, 41 seconds Hi Amit. So Amit uh we would want to see a sort of democratic increase in participation without being overly 13:50 13 minutes, 50 seconds aggressive in any one space. Um I think I'm quite happy with where we stand on the retail side. Um we we don't believe 14:00 14 minutes that u everyone who you know is an equity investor will end up becoming a commodity investor. So we are seeing the 14:08 14 minutes, 8 seconds numbers ramp up uh steadily and evenly and uh we will continue to retain our efforts in that growth. A lot of actions 14:15 14 minutes, 15 seconds that have been taken that we have worked with the market as well. Um as you said with u with digital members, digital 14:23 14 minutes, 23 seconds brokers uh looking at uh things like the uh consolidated ledger, looking at u uh 14:30 14 minutes, 30 seconds user experience of MCX trading, visav uh the EC markets. I think a lot of work went into that last year and we are 14:37 14 minutes, 37 seconds seeing the benefits of that. Uh we think there is more user experience opportunity uh to streamline and uh 14:46 14 minutes, 46 seconds continue to see interest in uh the retail segment. Having said that, you know, as we look at the 14:55 14 minutes, 55 seconds the numbers from um the AMC's uh the mutual funds and uh you know many 15:03 15 minutes, 3 seconds other segments like uh wealth and uh so on. So we do believe that retail will 15:09 15 minutes, 9 seconds also find these channels to start participating uh in the commodity market. So not all of this will be very straight and there 15:19 15 minutes, 19 seconds has been uh regulatory action where there is uh a lot more flexibility and opportunity that mutual funds uh will 15:28 15 minutes, 28 seconds see in the coming months uh when it comes to increasing the kind of commodity exposure in their 15:35 15 minutes, 35 seconds portfolios. So we we think retail will participate in all these ways. Um and overall we'd like to see that a broader multi- segment participation too. 15:47 15 minutes, 47 seconds Okay. And ma'am my second question is in terms of the product pipeline obviously you have mentioned last time also that uh know we are uh know we are you know 15:56 15 minutes, 56 seconds we will be launching some of the metal contracts. So where we are in terms of uh you know the launch of some new products which can uh know further 16:05 16 minutes, 5 seconds diversify uh our uh know volume contribution plus uh know in terms of the index option scaling up is it uh 16:13 16 minutes, 13 seconds only uh the FBI is not being allowed into know non-cash at all commodities is the only like bottleneck there or is there some other uh I know things which 16:22 16 minutes, 22 seconds is stopping the index options to scale up and secondly know there was an article in the newspapers which talked about some weekly contracts also being 16:30 16 minutes, 30 seconds considered uh in the index side uh know like what are your views on that? Thank you. 16:37 16 minutes, 37 seconds Yeah. So I think I'll first comment on this newspaper article and and we've in 16:42 16 minutes, 42 seconds fact put out our own um response um on X uh that uh you know uh misleading uh 16:51 16 minutes, 51 seconds media information is uh really getting published. So I will I will not really you know comment on that but the 17:00 17 minutes question that you asked on what what is the core question sorry yes yes yes 17:08 17 minutes, 8 seconds on product pipeline uh we do have a strong pipeline uh you know we had a certain number of products that we 17:16 17 minutes, 16 seconds wanted to look at last year and we launched according to what we thought the market will be appropriate in making 17:25 17 minutes, 25 seconds uh we are prepared with our uh next lot of um products and you know we again 17:31 17 minutes, 31 seconds will look at the suitable requirements uh in energy in metals um as well as you know other segments. 17:42 17 minutes, 42 seconds Now in the in the amongst the indices, interestingly uh you know while we did talk a lot about the bullex options, we 17:51 17 minutes, 51 seconds found that this created a lot of interest in the future segment and we are uh you know taking the feedback from 17:59 17 minutes, 59 seconds the market in uh focusing our attention on futures on indices as well along with options. 18:08 18 minutes, 8 seconds uh we will also be looking at uh moving further on uh metal decks this year. So there will be more work on the indices 18:15 18 minutes, 15 seconds side um as we both deepen and expand that portfolio. Okay ma'am thank you and all the best. 18:24 18 minutes, 24 seconds Thank you. 18:26 18 minutes, 26 seconds Thank you. Your next question comes from the line of Mesh from Access Capital. Please go ahead. 18:32 18 minutes, 32 seconds Hi ma'am. Thank you for taking my questions. Most of the question has been answered just on the participation side. 18:38 18 minutes, 38 seconds How have been the trends or in the participations in the month of April and May so far? 18:47 18 minutes, 47 seconds Hi Mesh. 18:49 18 minutes, 49 seconds Um I don't think we are commenting on this quarter. I think we'll have to take your question in the next call. 18:56 18 minutes, 56 seconds Uh but there's no dramatic yeah cause for concern. 19:04 19 minutes, 4 seconds Thank you ma'am. 19:08 19 minutes, 8 seconds Thank you. The next question comes from Akillesh Butter from Ampand. Please go ahead. 19:15 19 minutes, 15 seconds Hi ma'am. Uh congratulations on a good set of results. I had two questions. So first one was regarding your competitor 19:23 19 minutes, 23 seconds launching multiple uh boolean products and energy products in the last quarter and uh maybe from last year onwards. So 19:30 19 minutes, 30 seconds what are we doing to sort of protect market share here? 19:37 19 minutes, 37 seconds Hi Akillesh. So Akillesh yes we are watching the space very closely. Um it is a large competitor and yes they have 19:45 19 minutes, 45 seconds made their intention felt in the market with a lot of uh focus that they are placing on commodity segment. 19:53 19 minutes, 53 seconds Um from whatever we see our bullion numbers uh remain untouched. uh when it comes to market share over the last uh 20:02 20 minutes, 2 seconds two years uh some recent activity on uh changing you know expiry dates and so on 20:10 20 minutes, 10 seconds u in the energy uh segment is leading to um some kind of shallow one day in a 20:18 20 minutes, 18 seconds month activity um so I think it's also quite misaligned with um sort of global structuring on 20:27 20 minutes, 27 seconds which um our contracts are based uh and you know that is required for the integrity of the contract. So at this 20:35 20 minutes, 35 seconds stage um you know I think we we don't want to be reacting and uh making any 20:43 20 minutes, 43 seconds moves which are uh not cognizant with the way commodity products should operate. 20:49 20 minutes, 49 seconds uh being highly focused on the space uh we understand uh the structuring of these products and u what the market 20:57 20 minutes, 57 seconds needs. So we we will uh stay focused um on uh a uh continuing to drive 21:06 21 minutes, 6 seconds participation in the existing portfolio and looking at what the market needs uh by way of uh new products. So creating 21:14 21 minutes, 14 seconds that awareness, bringing in new participants, uh creating more um hedges, all of those core actions are in 21:20 21 minutes, 20 seconds play and um I think they're keeping us in goodstead. 21:27 21 minutes, 27 seconds Thanks a lot. Ma'am, one more question uh regarding RBI uh you know launching new lending norms for prop traders. So I 21:36 21 minutes, 36 seconds just wanted to understand if you have done any sort of analysis on the sort of volumes that will be hit or maybe what sort of volumes are coming in from u 21:45 21 minutes, 45 seconds small prop traders versus big prop traders if we have any numbers around that. 21:54 21 minutes, 54 seconds So the RBI lending norms uh the way we see it could have a potential impact. Um RB of course has given uh you know 22:04 22 minutes, 4 seconds further further extension uh allowing the market to um to plan their uh mitigating uh factors and we are also in 22:13 22 minutes, 13 seconds touch and working with our members on the same. So there will be a a certain segment of members across um you know 22:21 22 minutes, 21 seconds all segments of uh the trading markets uh who will have you know some of their 22:28 22 minutes, 28 seconds uh credit lines you know impacted from this. 22:35 22 minutes, 35 seconds Okay thank you ma'am that's all that's all from my side. Okay. 22:41 22 minutes, 41 seconds Thank you. Your next question comes from the line of Makarand Postker from Pro Invest near Miriti. Please go ahead. 22:50 22 minutes, 50 seconds Hello. Am I audible? Yes. 22:55 22 minutes, 55 seconds Uh hello. Uh congratulations on good set of numbers. Uh as we see a very good sequential growth in numbers uh top of 23:04 23 minutes, 4 seconds top line. I was expecting a kind of uh better expansion in margins but somehow the product license fees and other 23:12 23 minutes, 12 seconds expenses line items grew faster than the revenue. So we could not see the expected margin expansion. 23:21 23 minutes, 21 seconds So can you tell me if there is any uh oneoff in these line items or we can expect these uh as a normal base? 23:30 23 minutes, 30 seconds Uh Makan thank you. Um you know Makan we are in growth phase um and you know we are looking at actions to keep the 23:39 23 minutes, 39 seconds market very very relevant and to look at how we really develop the commodity markets uh to meet the requirements of 23:48 23 minutes, 48 seconds um the industry as well as the country as we uh have to mature and have more uh 23:56 23 minutes, 56 seconds sophisticated offerings available across the board. Um and uh we have to keep our 24:03 24 minutes, 3 seconds technology expense um our expense on um our our investments uh on people all of 24:10 24 minutes, 10 seconds these elements uh have to be built out continue to be built out uh 24:17 24 minutes, 17 seconds to be ready uh to execute the plans that we have. 24:23 24 minutes, 23 seconds So if you are asking whether uh you know our focus is going to be on margins in the coming months, our focus will be on 24:31 24 minutes, 31 seconds efficiency. Our focus will be on ensuring that whatever we do is done um in a manner that is uh most efficient on cost and smart. 24:43 24 minutes, 43 seconds Um but the focus is not going to be on uh spending less. uh we have to 24:50 24 minutes, 50 seconds continue to spend spark smart and uh do the right thing to be prepared for the future. 24:58 24 minutes, 58 seconds Uh okay. So there was no one-off items, right? No, no. 25:08 25 minutes, 8 seconds Okay. Thank you. Uh my next question is uh as you said in the first uh answering the first question that uh you are uh 25:15 25 minutes, 15 seconds expecting to the momentum to be continued. Uh but when you look when we look at the April numbers the volume 25:24 25 minutes, 24 seconds seems to have uh dipped down quite a bit. So uh do you think that uh we will be able to continue the sequential momentum? 25:37 25 minutes, 37 seconds So we do believe that uh we will have a strong year. Um now will every year every quarter be a big jump over the 25:45 25 minutes, 45 seconds previous quarter? Perhaps uh not and we do see cyclicity in our business. Uh we have seen that year on year where there 25:54 25 minutes, 54 seconds are some quarters that are better than other quarters. So there will be macro factors that will play out. there will be cyclicity that plays out 26:02 26 minutes, 2 seconds and I think in the in the broader context uh we are in a strong and good place. 26:10 26 minutes, 10 seconds Okay. So thank you all the best. Thank you. 26:14 26 minutes, 14 seconds Thank you. Your next question comes from Lana from UBS. Please go ahead. 26:21 26 minutes, 21 seconds Hello. Uh thank you for opportunity ma'am and uh congratulations on good set of numbers. Most of my questions are 26:29 26 minutes, 29 seconds answered. Just wanted to check on um some of the costline items. Uh software support charges. Uh I mean it has been 26:37 26 minutes, 37 seconds quite stable uh compared to the jump which we have seen last year in Q4 and 26:44 26 minutes, 44 seconds uh second is on the SGF spends. So this time we have taken a much higher uh contribution to uh SGF. Uh so how should 26:54 26 minutes, 54 seconds one see this trend going ahead? Uh yeah. So hi uh Lavana, this is Chandesh. 27:03 27 minutes, 3 seconds Uh so uh the HTF spend is more to uh keep our uh uh reserve fund in a healthy 27:12 27 minutes, 12 seconds position so that uh it helps us in taking some decisions uh and mitigate 27:19 27 minutes, 19 seconds risk. So we always uh maintain the SGF at a healthy level and we'll continue to 27:25 27 minutes, 25 seconds do that. And uh it is in line with what we see the business going up and how it 27:32 27 minutes, 32 seconds is uh how it is growing. And also SGF is a requirement of SEBI and it is uh 27:39 27 minutes, 39 seconds computed based on the formula and calculation methodology given by SEBI and uh I think the other question you 27:46 27 minutes, 46 seconds already answered that it is very much in line. Software support software support 27:54 27 minutes, 54 seconds uh okay software support charges should be uh stable and incremental from here and uh most likely we should see uh 28:05 28 minutes, 5 seconds no no jump in Q4 is that something one should build in so yeah like ma'am explained in the 28:13 28 minutes, 13 seconds previous call previous caller's uh response so we are into uh growth phase and we will keep investing in the business as and when what is required. 28:23 28 minutes, 23 seconds The only thing is that it will be done very efficiently. Uh so when the business requirement is there uh expenses will be incurred. 28:33 28 minutes, 33 seconds Got it. Got it. Thank you. Thank you so much. All the best. Thank you. 28:39 28 minutes, 39 seconds Thank you. Your next question comes from Vidant Agarwal from IFL. Please go ahead. 28:47 28 minutes, 47 seconds Um hey. Hi. Uh first of all uh congrats on a great set of numbers. Uh so I wanted to understand two bookkeeping 28:55 28 minutes, 55 seconds numbers. So what has been the interest income on margin money for 4Q F26 and for the whole year FI26 and I also 29:02 29 minutes, 2 seconds wanted to again touch upon other expenses like we have seen a sharp jump uh in 4Q. So what has been the key driver behind this? So these are the two questions. 29:14 29 minutes, 14 seconds Yeah. So uh this quarter we have seen some increase in the margin money in terms of cash with the subsidiary and 29:23 29 minutes, 23 seconds that has helped in uh some increase in the income from that and uh 29:32 29 minutes, 32 seconds it is it is it is it is 22 crores in this quarter. 29:44 29 minutes, 44 seconds Sorry. 59 crores in this quarter as against 22 crores of previous year. 29:50 29 minutes, 50 seconds Okay. 59 crores in this quarter versus 22 crores of last year. Quarter four. 29:57 29 minutes, 57 seconds Quarter four. Okay. 30:00 30 minutes And also if you could uh justify the increase in other expenses for this quarter. 30:06 30 minutes, 6 seconds So I think ma'am already answered in the one of the previous response that the expenses are uh incurred to meet uh our 30:16 30 minutes, 16 seconds uh market development activities and uh business related uh professional charges. 30:27 30 minutes, 27 seconds Okay. Fine. Thank you so much. That answers the question. Thank you. 30:34 30 minutes, 34 seconds The next question comes from the line of Barat Sha from BCS Capital Ideas Limited. Please go ahead. 30:41 30 minutes, 41 seconds Yeah. Uh uh thank you Praini and congratulations for uh uh very distinguished and uh defining results. 30:53 30 minutes, 53 seconds Uh uh I have two questions. The first one in uh this very uh 31:02 31 minutes, 2 seconds what what primacy appears to be uh venol kind of scenario where volumes are 31:10 31 minutes, 10 seconds rising rapidly. Uh we have increased number of market intermediaries. We have increased number of clients through 31:17 31 minutes, 17 seconds those intermediaries and our products product engine is working well. Uh and all of this is 31:28 31 minutes, 28 seconds resulting into dramatic growth rates across our uh product lines and the businesses. 31:36 31 minutes, 36 seconds In such a rem positive scenario, what can go wrong 31:43 31 minutes, 43 seconds if something has to go wrong and what can actually 31:49 31 minutes, 49 seconds uh unravel or disturb uh the uh the kind of great velocity that the engine has acquired. 32:02 32 minutes, 2 seconds No, I think uh it's a fantastic question. Um and we of course track all risks uh at every stage. Um certainly 32:10 32 minutes, 10 seconds operating risk is number one and I think we we've spoken the past at length that uh you know while the market offers 32:19 32 minutes, 19 seconds opportunities the ability to operate and uh deliver to that opportunity u is really uh not something one takes for granted. 32:30 32 minutes, 30 seconds So whether it is um the platform, whether it is our surveillance, whether it is our uh risk management, um the 32:40 32 minutes, 40 seconds operations of CCL when it comes to uh margins and collateral, each and every element of this uh gets challenged when 32:48 32 minutes, 48 seconds there is a high degree of uncertainty in the market. Uh so this is a risk we are very cognizant of. I would say we spend 32:55 32 minutes, 55 seconds most of our time on um in addition to all the other levers that you spoke about. So I I would think this is a 33:02 33 minutes, 2 seconds hidden lever uh to add to that list. Uh the second is certainly um the competition risk. I think this question 33:11 33 minutes, 11 seconds was asked. So we are cognizant uh that we have not had a strong competition 33:17 33 minutes, 17 seconds really and have been a majority market share player. how to continue to be um agile on our toes, continue to innovate 33:27 33 minutes, 27 seconds um you know sort of challenge ourselves um and really be our own um you know competitor is the best way to scape that 33:35 33 minutes, 35 seconds off. So certainly uh that risk again holds a lot of our attention. Um and of course I can go with a long list um the 33:44 33 minutes, 44 seconds regulatory risk etc. being an MI you know entire uh focus on uh working within the uh 33:53 33 minutes, 53 seconds compliance framework again something that takes a lot of our attention with a strong compliance team our uh investor 34:00 34 minutes uh services and relations etc etc. So I think this will if you ask me probably um cover the top ones. 34:10 34 minutes, 10 seconds Uh probably I did not mean routine or regular threats uh whether management competence will be there to match the 34:19 34 minutes, 19 seconds competition. Obviously uh determines an ongoing issue of vigil uh both within 34:25 34 minutes, 25 seconds MCX as well as by the outside investors whether there can be regulatory 34:32 34 minutes, 32 seconds uh oversight which can curtail the remit of the business. Obviously certain such issues will always be there in the 34:41 34 minutes, 41 seconds horizon. uh I did not really mean uh things of these kind. I mean operational 34:49 34 minutes, 49 seconds routine risk, competitive risk, these are given. I mean they have to be there for any good management to deal with and 34:56 34 minutes, 56 seconds to fight on. What I meant was for example if you look at uh uh ex uh the 35:04 35 minutes, 4 seconds energy exchange out of blue uh the market coupling issue has comes and uh 35:11 35 minutes, 11 seconds that is very clearly derailed uh uh the situation because 35:18 35 minutes, 18 seconds uh uh market price discovery is the key function of an exchange and when uh that gets taken away uh then the role of 35:28 35 minutes, 28 seconds liquidity and management in order to facilitate that efficient discovery becomes commoditized and therefore 35:36 35 minutes, 36 seconds exchange becomes commoditized and we are seeing how ex is struggling with that 35:43 35 minutes, 43 seconds issue. If you look at for example in the equity markets three years back the op 35:51 35 minutes, 51 seconds in the options the share of BAC was next to nothing. I mean it was uh just a 35:58 35 minutes, 58 seconds shade above zero and today in about 3 three and a half years it has climbed to 36:05 36 minutes, 5 seconds on an incremental basis to almost about 37 38%. I mean uh that kind of a change 36:12 36 minutes, 12 seconds is truly a dramatic one. Uh so issues which 36:19 36 minutes, 19 seconds are not in the realm of recognition because when things are good and healthy risks don't look very real and they 36:27 36 minutes, 27 seconds appear distant in the horizon but that's actually where the person yeah in the 36:34 36 minutes, 34 seconds interest of time if I may come in I I think I I get what you're saying I I think I sort of touched upon those um and I think the examples uh that you 36:43 36 minutes, 43 seconds gave are uh in the realm of uncontrollables. 36:47 36 minutes, 47 seconds Um so I I I think we will be unable to really comment or uh really react to that question. 36:55 36 minutes, 55 seconds Okay. There is nothing there you are aware of what is the problem. 37:01 37 minutes, 1 second No I I'm just finishing my first question. Please allow me to complete. 37:08 37 minutes, 8 seconds Uh is there anything in the realm of recognition that you are concerned about or worried about? 37:17 37 minutes, 17 seconds No, we we are not worried okay about anything specific. Okay. 37:23 37 minutes, 23 seconds Uh my second and last question is sorry to interrupt Mr. Sha. Uh may we request you to keep the questions brief uh as I believe uh there are uh 37:32 37 minutes, 32 seconds questions. Uh this is not the first question. 37:38 37 minutes, 38 seconds This was the first question and in the context of which I raised the question. 37:42 37 minutes, 42 seconds If you can allow me to complete it, it will be faster. Uh sir, may we request you to return. Okay, fine. Thank you. 37:50 37 minutes, 50 seconds For any follow-up questions. Thank you. 37:53 37 minutes, 53 seconds Your next question comes from the line of Baba Sangri from Alami Capital. Please go ahead. 38:00 38 minutes Uh congratulations on a great set of numbers. Um most of my questions have been answered. Uh just one bookkeeping 38:08 38 minutes, 8 seconds question. Can you give me the transaction charges for the quarter and split it up between options and futures? Thank you. 38:17 38 minutes, 17 seconds So uh future revenue for Q4 is 242 crores and options revenue is 569 crores. 38:31 38 minutes, 31 seconds Thank you. Thank you. 38:38 38 minutes, 38 seconds The next question comes from the line of Submana, an individual investor. Please go ahead. 38:44 38 minutes, 44 seconds Uh hello ma'am. Uh congrats on a great set of numbers. My uh questions have been previously answered. Thank you so much. 38:53 38 minutes, 53 seconds Thank you. Thank you. 39:01 39 minutes, 1 second Your next question comes from the line of Dil Sha from Palm Capital Management. Please go ahead. 39:09 39 minutes, 9 seconds I firstly congratulations on the great results. My first question would be on the similar lens like previous 39:17 39 minutes, 17 seconds participants have inquired about in the competition. So like Barata mentioned that equity exchanges are getting into 39:26 39 minutes, 26 seconds not just the largest one but the and the other one has also shown some interest in getting into the commodity side. So 39:35 39 minutes, 35 seconds just wanted to check I mean what are the key factors or drivers that would change retailers mindset to shift from 39:44 39 minutes, 44 seconds retailers or I mean rather any trader to shift from MCX to other actions. I mean what incremental do these exchanges have 39:52 39 minutes, 52 seconds to offer so that they gain some market share? 39:59 39 minutes, 59 seconds Yeah. Hi Rish as I said of course competition is critical to watch out for and the uh we 40:07 40 minutes, 7 seconds should not take the competitive stance lightly. 40:11 40 minutes, 11 seconds So as equity exchanges uh enter into the commodity space there could be some you know natural sort of synergies they have 40:18 40 minutes, 18 seconds there. However the biggest note really is the liquidity we have in our contracts. So while it may be um a tad 40:26 40 minutes, 26 seconds easier not much as I said we've done a lot of work on user journeys and so on and so forth and we continue to do so. 40:32 40 minutes, 32 seconds So while there could be it could be a tad easier um the real benefit for any participant um arises in the fact that 40:40 40 minutes, 40 seconds they are there in a in a liquid exchange they can enter and exit as they require and uh they they benefit from the 40:48 40 minutes, 48 seconds overall um investing or uh trading activity. So I think uh these are critical uh for us and 40:57 40 minutes, 57 seconds uh we think these are the the biggest modes that we have but we we'll continue to work uh in the space uh without 41:04 41 minutes, 4 seconds ignoring the fact that uh we should overcompensate for uh any um experiential simplicity uh that may be available to users otherwise. 41:17 41 minutes, 17 seconds Understood. And last question would be again I there is one article uh in the newspaper today about some regulations 41:25 41 minutes, 25 seconds being relaxed for agri commodities. So you think that could scale up in coming year and what could be the size as could 41:32 41 minutes, 32 seconds it be as big as energy or bullion or uh just a rough sense. 41:41 41 minutes, 41 seconds Um sorry I don't think this uh uh you know there is this this article 41:48 41 minutes, 48 seconds but I'm not able to comment on the backdrop to it. Um of course we are um 41:55 41 minutes, 55 seconds we are uh in discussions and working groups uh with the industry uh and the 42:02 42 minutes, 2 seconds regulator to look at uh various kind of policies uh that the industry and market requires um in agriculture is one of them. 42:12 42 minutes, 12 seconds So we are participating and I think whatever opens up in that space uh will be beneficial 42:20 42 minutes, 20 seconds um and uh we will also be uh looking at how we play a stronger role there. I I I wouldn't be in a position to share more than this at this point please. 42:31 42 minutes, 31 seconds Oh yes thank you. Uh now just jumping back to the first question you mentioned that liquidity is the core thing that MC has for commodity derivatives but like 42:40 42 minutes, 40 seconds in case of equities as well I mean BSE had gain within two years from I mean they had also zero liquidity in that 42:46 42 minutes, 46 seconds sense what made I mean made I mean what could go wrong in MSX as 42:54 42 minutes, 54 seconds well I mean just wanted to understand that is liquidity if I mean there are if these exes are coming up with more innovative products which 43:03 43 minutes, 3 seconds might seem more attractive to the investors and could the liquidity over time I mean build up for them as well. 43:16 43 minutes, 16 seconds Um you know I think uh we gave our comments earlier that uh these are uncontrollables that you know we will not really be commenting on at this 43:25 43 minutes, 25 seconds stage. The commodity market you know is at a fairly nent to high growth stage. 43:32 43 minutes, 32 seconds um certain actions u might take place in mature markets with different objectives. 43:39 43 minutes, 39 seconds Um so but having said that uh this is not a space that we can really comment on. It's not uh an actionable in our control. 43:50 43 minutes, 50 seconds Okay. Okay. Thank you so much for answering and all the best. Thank you. 43:56 43 minutes, 56 seconds Thank you ladies and gentlemen. We request everyone to limit themselves to only two questions each per participant and we'll 44:04 44 minutes, 4 seconds join the queue for any follow-up questions. Our next question comes from the line of Maduka from JP Morgan. Please go ahead. 44:13 44 minutes, 13 seconds Hi uh good evening. Thank you for taking my question. I have just uh one uh question on SGF. uh how comfortable are 44:23 44 minutes, 23 seconds we with the SCF uh position right now and what is our uh sort of continuing policy in terms of uh what percentage of 44:32 44 minutes, 32 seconds transaction charges uh are we contributing uh have we put out that number uh in in definitively uh part of 44:41 44 minutes, 41 seconds yeah that's my question yeah so on SGF right now we're in a comfortable position uh we have a very 44:48 44 minutes, 48 seconds good question on SGF And uh Maduk we have not put out any percentage or anything of transaction charges for ACF. 45:01 45 minutes, 1 second Got it. So uh is there sort of a number in terms of what volume option premium 45:08 45 minutes, 8 seconds or futures uh that we would be comfortable with and beyond which we would require? I know uh uh some 45:15 45 minutes, 15 seconds simplistic measure to to just know that so so madukar is just not a function of 45:23 45 minutes, 23 seconds numbers it's also a function of volatility and the margin levels so it's it's a combination of everything so as 45:30 45 minutes, 30 seconds volatility would increase or volumes would increase simultaneously and y would increase then only with the sgf requirement increase so it's very 45:39 45 minutes, 39 seconds difficult to predict all the moving parts altogether having said that We we are in a very comfortable position regarding SGF and as and when we have 45:48 45 minutes, 48 seconds the requirements we plan for it and finally sorry to interrupt sorry that you would recommend sorry to 45:56 45 minutes, 56 seconds interrupt may we request you return to the queue for any follow-up questions please 46:04 46 minutes, 4 seconds thank you next question comes from the line of Madu Gupta from Quantum AMC please go ahead thanks for taking my question congrat 46:13 46 minutes, 13 seconds Congratulations for a good set of numbers. I just have two questions. 46:16 46 minutes, 16 seconds First is uh what is the revenue that you've earned from the electricity derivative contract transaction charge which started in FI26 the trading of 46:25 46 minutes, 25 seconds electricity derivatives? That's first question and second question is you recently won the license to set up a coal exchange. What is the road map 46:32 46 minutes, 32 seconds there? What is the addressable market size and how do you plan to you know set up the exchange and yeah if you could share some plans regarding that. Those are my two questions. Thanks. Yeah. 46:42 46 minutes, 42 seconds So, electricity contracts are still uh in early stage at the stage uh rather than tracking revenue uh we look at the 46:50 46 minutes, 50 seconds membership on boarding uh trading through portut so on and so forth. So we are happy uh we've got about uh uh 50 46:59 46 minutes, 59 seconds participants from the commercial participant side and a large number of members uh who contribute and uh trade 47:07 47 minutes, 7 seconds the UCCC numbers also are going up months. 47:11 47 minutes, 11 seconds Uh when it comes to uh coal uh the coal exchange is an independent uh entity. It 47:19 47 minutes, 19 seconds uh will not be part of uh MCX as a company. it'll be a part of a uh it'll operate as a subsidiary. 47:29 47 minutes, 29 seconds Uh since we are an MI under the regulatory ambit of SEBI, we required the SEBI approval to go forward in this line of business. The line of business 47:38 47 minutes, 38 seconds we see is uh uh closely associated with uh what we do as a commodity derivatives 47:45 47 minutes, 45 seconds exchange establishing a spot market in coal where uh there is a mechanism that 47:53 47 minutes, 53 seconds exists. Um however uh there is a lot of opportunity for uh structuring consolidation um common platform pan India and so on. 48:04 48 minutes, 4 seconds So I think that's the opportunity we're looking at and we are in the early stage of establishing uh that entity and 48:12 48 minutes, 12 seconds taking it forward at the right time. Of course the suitable regulator in that space uh will then form the rules. We'll 48:21 48 minutes, 21 seconds have to apply and etc etc. So there is there are steps left before uh the actual entity starts getting operational. 48:30 48 minutes, 30 seconds Okay. Thanks. Thanks. 48:35 48 minutes, 35 seconds Thank you. The next question comes from the line of Deepak Kajmira from IG India. Please go ahead. 48:43 48 minutes, 43 seconds Thank you. Congratulation on good set of number and uh excellent uh leadership. Uh the my question is on electricity derivative. 48:54 48 minutes, 54 seconds Ideally the potential for this uh market is significant and what sort of initiative 49:02 49 minutes, 2 seconds uh whether it is ministry exchange regulator or um anything to develop this 49:10 49 minutes, 10 seconds market that on that you are working if you can highlight that will be helpful and it will 49:19 49 minutes, 19 seconds yeah thank you Deepak I think we are very excited about the electricity contract. Right from launch 49:26 49 minutes, 26 seconds to date, it has been uh growing month on month in its u participation and um presence in the market. 49:38 49 minutes, 38 seconds uh we do work with the regulators uh both the SEBI and CC but more importantly a lot of work with the uh 49:47 49 minutes, 47 seconds with the state regulators uh because a lot of policy really comes from the state um converting few discoms 49:56 49 minutes, 56 seconds uh is a very important part of the plan um it takes more time but I think we are at a point where some of that is going 50:04 50 minutes, 4 seconds to come in as well uh looking at uh large traders who operate on the spot market um has been important and those 50:14 50 minutes, 14 seconds were some of the early steps that have been taken and we are starting to see some of uh the members and participants 50:21 50 minutes, 21 seconds um in the power space uh starting to uh participate uh regularly there. So staying engaged with both the production 50:31 50 minutes, 31 seconds side uh be it uh solar or other producers the consumer side a large uh 50:38 50 minutes, 38 seconds industrial as well as the distribution side uh are all actions that we are in the midst of. 50:52 50 minutes, 52 seconds Thank you. Thank you. 50:56 50 minutes, 56 seconds The next question comes from the line of Amit Chandra from HDFC Securities. Please go ahead. 51:03 51 minutes, 3 seconds Uh yeah, thanks for uh you know allowing me to ask the question again. Um m I have like two follow-up questions. Uh 51:11 51 minutes, 11 seconds the first is on the the competition. You have answered about that in detail. But uh you know just to understand better is it the interoperability of the clearing 51:20 51 minutes, 20 seconds corporations which is not there between equities and commodities. Is that the main reason why we are not seeing seeing 51:27 51 minutes, 27 seconds the shift of uh the liquidity from one exchange to another? and uh uh know what's your view on uh the regulator 51:36 51 minutes, 36 seconds allowing interoperability maybe at a later stage and uh secondly on 51:43 51 minutes, 43 seconds the impact of the RBI regulation so the I know if you see the clearing corporation uh funding from FDS and uh 51:52 51 minutes, 52 seconds know the bank guarantees uh the uh total margin like money that the clearing 51:59 51 minutes, 59 seconds corporation have MCX has the highest in terms of 55 to 60% of the total know funding of the clearing corporation is through BGS versus 35% for the industry. 52:10 52 minutes, 10 seconds So is it a know higher risk for us in terms of the impact that we see from RBA? Thank you. 52:19 52 minutes, 19 seconds So to answer your question on BGS and FDS, frankly for FDS it won't funded. 52:28 52 minutes, 28 seconds In terms of BGS, I think your numbers are wrong. BGS contribute a much lower percentage than so 52:36 52 minutes, 36 seconds while there may be an impact but the numbers not impact as much as you are saying. 52:43 52 minutes, 43 seconds So I'm talking about FDs and BGS combined. uh the we don't have the bification but so as you see the large portion the 52:52 52 minutes, 52 seconds largest portion of that is at least so I don't think that would get affected to that extent okay 52:58 52 minutes, 58 seconds secondly on your uh interopity question liquidity does not just go away due to interoperation 53:06 53 minutes, 6 seconds it's matter of liquidity begets liquidity we have liquidity we have uh the industry participating we have every 53:14 53 minutes, 14 seconds month all all uh ingredients which help that and also you have to understand secondly that uh uh interoperability is 53:23 53 minutes, 23 seconds only possible when there is a 100% similar product for example in equity 53:30 53 minutes, 30 seconds the ISIN of the security is the same that is why interoperability can be possible in commodities 53:38 53 minutes, 38 seconds uh commodities may be different okay so uh the the gain profitability 53:46 53 minutes, 46 seconds will not happen between equities and commodities, right? 53:50 53 minutes, 50 seconds We're not saying that we we just saying that uh end of the day it's up to the regulator but uh it's tougher to have that. 54:01 54 minutes, 1 second Okay. Okay. So, thank you. 54:06 54 minutes, 6 seconds Thank you. We will take the last question from the line of D Shakural from Capital. Please go ahead. 54:16 54 minutes, 16 seconds Yeah, thank you for the opportunity again ma'am. Uh just one question ma'am. 54:20 54 minutes, 20 seconds Uh we see that this has been a very strong year uh for us in terms of uh profit accretion and cash accretion but 54:27 54 minutes, 27 seconds uh despite that we've seen that the payouts have kind of gone down. So just wanted to know your thoughts as to uh this cash that we are kind of 54:36 54 minutes, 36 seconds conserving. What are exactly the plans for this and what is the spend that we expecting for the next year? 54:46 54 minutes, 46 seconds Yeah. No, no. Uh good question, Dish. I think it's important for us to have um 54:53 54 minutes, 53 seconds the sort of um funding chest uh that is required as we look at our growth. Uh 55:00 55 minutes and this is not just from um from a more of the same standpoint. Uh there would be uh both organic inorganic uh 55:10 55 minutes, 10 seconds opportunities that we will continue to be looking at uh new product segments um ancillary spaces. Um so there are 55:19 55 minutes, 19 seconds certain strategies that um are at very early stage uh but we do have um uh strong plans uh for the capital on hand. 55:32 55 minutes, 32 seconds All right, ma'am. Thank you so much and all the very best. 55:38 55 minutes, 38 seconds Thank you. Ladies and gentlemen, I would now like to hand the conference over to Miss Praina Ray, MD and CEO MCX for her closing comments. 55:50 55 minutes, 50 seconds Yeah, thank you. Thank you to all. Um, it is a phenomenal set of questions. Um as always we answer some and uh you also 55:59 55 minutes, 59 seconds leave us with a lot of uh food for thought to take back as we look at uh execution of our plans for this year and the coming quarter. 56:07 56 minutes, 7 seconds I really enjoyed the discussion all of us did. 56:10 56 minutes, 10 seconds Have a good day and look forward to connecting next time. 56:16 56 minutes, 16 seconds Thank you on behalf of Multicommodity Exchange of India Limited. That concludes this conference. Thank you everyone for joining us and we will now disconnect your lines.