MCX's 75% margin was helped by a fund contribution it expects to restart

Multi Commodity Exchange of India, the country's main venue for commodity futures and options, earned an EBITDA margin of 75% in the first half of its financial year, and its profit after tax more than doubled, up 117% on a year earlier, the company said. EBITDA is earnings before interest, tax, depreciation and amortisation; MCX measures the margin against total income. The first quarter's margin had been 72%, so the second quarter ran higher still. Part of that lift came from a cost the exchange did not pay in the quarter, and management has said it will start paying it again.

The cost is MCX's contribution to its settlement guarantee fund, the pool its clearing subsidiary holds to cover a member that cannot pay for its trades. The exchange tops the fund up out of its own income. In August 2026 the market regulator, SEBI, changed how the required size is worked out, lowering a parameter in the Z-score method from 10 to 5, which the chief financial officer, Chandresh Shah, said cut the requirement substantially. Because the money already in the fund covers the smaller target, the quarter's contribution line held only payments to investor-protection funds and other regulatory charges, and Shah agreed that the change had raised profit.

The line used to matter. In the first quarter of the previous financial year it came to ₹26.8 crore, just under 8% of futures and options transaction revenue, calculated from the reported figures. An analyst on the call put the latest quarter's line at about 3.3% of transaction income; Shah said the saving could not be measured because no contribution was made, but pointed to the first quarter's contribution in the disclosure notes as a guide to its size.

The break is short by management's own account. Praveena Rai, the managing director and chief executive, said the fund's existing balance gives a cushion for perhaps a couple of quarters, after which contributions must restart, though at a level expected to be much better calibrated. That points both ways: SEBI lowered the requirement itself, so some of the saving should last, but the quarter's near-zero charge is not the level to expect once payments resume.

The fund was not the only force on the margin. Average daily turnover rose to ₹12.6 lakh crore in the quarter, up 20% on the quarter before, the company said. Much of an exchange's cost does not rise trade for trade, so heavier trading on its own pushes the margin up, and the two effects arrived together.

Other costs moved the opposite way and are meant to stay. Rai said the exchange had nearly doubled its technology capacity in recent months and described the higher spending as the running cost of that capacity, with one-time outlays booked as capital spending instead. Shah linked a sharp rise in product licence costs to turnover, through the fee MCX pays CME for crude oil prices. In August 2025 the chief executive had said continued technology investment was not expected to bring another big bump in costs, though in January 2026 she said expenses were lagging growth and would be normalised over time.

Tax is the third change. In the first quarter of the previous financial year the effective tax rate was 20.72%, and on that August 2025 call Shah guided for around 21-22%. Shah now expects closer to 25%. The latest quarter's charge was heavier than that, because the clearing subsidiary booked a tax provision and the company re-estimated its annual rate after the SEBI circular, applying it to the whole half-year; across the six months the rate was close to 25%. Profit after tax will therefore grow more slowly than pre-tax profit for a given level of trading.

Analysts asked more than once whether the margin would hold. Rai declined to give a number. The chief executive said no significant change in EBITDA was expected, while adding that growth in scale, technology, information security and new products will all need spending. That leaves holders to weigh the parts themselves: heavier trading and a lower fund requirement on one side, and on the other a fund contribution due to restart within a few quarters, technology and licence costs that scale with the business, and a tax rate about three to four points above last year's guidance. The quarter in which contributions resume, and the size at which they restart, will show how much of the 75% belongs to the business and how much to the pause.