Crude and gold again are fairly good contracts even within the option space, Mrugank Paranjape, MD & CEO, MCX, tells ET Now. 67543900

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Edited excerpts:How are the sequential volumes and give us colour on the tractions across key segments particularly crude oil and gold? We have seen a stellar quarter in terms of our results. This was the highest ADT we have seen after the imposition of CTT. In terms of the numbers, sequentially our volumes are up 8% but in terms of profit, our PAT is at Rs 42 crore compared to Rs 18.7 crore last year. For last quarter, if you look at the revenue numbers, we are seeing an overall increase of more than 20% on the revenues. So, I think it has been a stellar quarter. In terms of the sectors, it is mainly crude and followed by bullion which has really done well. Crude, has been outstanding last quarter but we are also very positively encouraged by what we have seen in bullion and that is because bullion has been a very important contract for us in the past. We lost some traction in between when the volumes came off but we are seeing very good growth again coming back on the bullion space now. What is your realisation trend quarter on quarter and trajectory of transactional revenue along with the kind of spends that you are seeing in terms of ads? The ADT trend has been positive this entire year. We have seen growth continuously on a quarter on quarter basis. Last quarter, we had more than 10% growth. This quarter we have seen more than 8% growth. We are very confident that the ADT numbers are growing at a very healthy pace. Of course, this has led to some of the larger members growing faster than the rest of the market, which means our realisation has gone down. We started the year somewhere at about 2.22% but progressively we come to about 2.15%. In the last quarter, realisation went down by about 1.8% and over the year, full year realisations down by about 2.5% to 3%. What is the EBITDA margin range that you are aiming over the next four to six years? The operating leverage is on your side but analysts point out that higher software expenses and increase in CME royalty could put pressure on the margins going forward? The EBITDA margin is now up to about 49% from 38% last year. On a quarter on quarter basis, it has remained flat. Last quarter we were at 48% and this time, we have grown to 49%. We have grown this number by even that one percentage point in spite of the fact the CME number is higher, Therefore there is no reason for the CME number to put any further pressure on this. But this quarter, there have been some one-off expenses of about Rs 4 crore. The EBITDA margin can even move further. We have always looked at 60% aspirational number on EBITDA margins and that is the trajectory we see ourselves growing towards in the next four to six quarters. How is the liquidity in options and the level of pickup which you are seeing in institutional participation? Institutional participation is a different topic. It is not yet allowed in this segment. We only have AIF category III funds which are allowed and even those got facilitated in terms of their participation only after December when SEBI removed the obstacles from a custodial point of view. When it comes to the overall liquidity in options, we have seen some very good liquidity in crude and in gold and especially in crude where the retail volumes are picking up. From our perspective, crude and gold again are also fairly good contracts even within the option space. After NSE-BSE launched commodity derivatives trading, what has been your strategy with regards to mitigating competition? We have been very categorical in our views that incentivisation does not work in this market. What is important is that you should have a product which completely reflects what the market wants. Our product does that. In gold, we have added five or six delivery centres in the last quarter and that has added to the depth of our product. Our technology remains as agile and as efficient as it needs to be and our people are absolutely connected to the market. Those are important steps. That is how we will engage in terms of the competition. We do not think mere incentives or price is the way to go after in this market especially when you have a product which is so relevant and which is widely used in the market and is currently used by both. Going by the pace of reforms under SEBI, what are your plans over the next one or two years in terms of new opportunities, products and alliances? The biggest opportunity will be both on product and participants. We see index based trading adding a new dimension to this market and we also see the advent of mutual funds and PMS providers to add to the depth of this market. Those would be the two big things from a regulatory change that we are looking forward to. Are you in talks with NSE for a merger because that would be a solid team or rather trigger for bigger exchange play and the Street has been abuzz with this kind of possibility? In terms of any inorganic actions, we have issued our clarification way back. It is available on the BSE website which is our primary listing exchange. There is no further clarification we can provide.