Shares of Multi Commodity Exchange of India rose around 2.5% on October 26 after Jefferies reiterated its Buy rating on the stock and retained a target price of Rs 4,000. The target implies an upside of approximately 32% from MCX's previous closing price of Rs 3,020.30.

Jefferies believes the recent correction in MCX shares has been driven largely by weakness in gold prices, but the brokerage argued that the market may be overlooking the exchange's growing exposure to energy contracts. According to the brokerage, bullion accounts for around 40% of MCX's transaction revenue, while energy contracts contribute approximately 60%.

The brokerage highlighted stronger trading activity in energy derivatives amid elevated crude oil prices and increased geopolitical uncertainty. Energy options average daily turnover rose 44% month on month in September 2026, while October month to date turnover stood at around Rs 9,200 crore, approximately 48% higher than August levels.

Jefferies said that if the elevated options activity continues through the December quarter, MCX's FY27 revenue and earnings estimates could increase by around 4% to 5%. The brokerage therefore described MCX as a potential hedge against crude volatility, arguing that periods of higher oil price volatility can increase hedging and trading activity in energy contracts.

Jefferies also noted that options account for around 75% of MCX's revenue and that options revenue is closely linked to market volatility. Higher volatility can therefore support transaction activity even when underlying commodity prices are under pressure.

The brokerage expects structural growth opportunities to further support MCX. These include increased participation in commodity derivatives, new product launches and greater participation from foreign portfolio investors in non cash contracts. Jefferies also sees potential from initiatives such as colocation and a coal exchange, which it estimates could add 15% to 20% to earnings over the medium term.

Despite the recent correction, Jefferies expects MCX revenue to grow at a 25% compound annual growth rate through FY29. The brokerage believes India's commodity derivatives market remains less penetrated than its equity derivatives market, leaving MCX with room for further expansion.

The stock had declined around 12% over the previous month alongside the correction in gold prices. However, Jefferies believes the earnings impact is more closely linked to crude and energy trading activity, making the recent decline an attractive entry opportunity.