MCX extends Software Service contract with 63 Moons; Stock rallies over 22%!

Today the shares of 63 Moons Technologies Ltd zoomed over 13% in the early morning session and currently trading around Rs 245 per share on the BSE. The stock commenced trading at Rs 238, representing a 9.8% increase from the previous day’s closing price of Rs 216.75.   

The largest commodity exchange in the country, Multi Commodity Exchange (MCX), has decided to extend its support services provided by its current software vendor, 63 Moons Technologies Ltd., for an additional six months, starting from July 1, 2023.   

According to a regulatory filing, MCX has disclosed that the compensation for the extended support services provided by 63 Moons Technologies Ltd. would be Rs 125 Crore per quarter. This amount represents an increase compared to the previous quarter, where the consideration paid was Rs 87 Crore for the March 2023 quarter.   

In the last one week the stock has generated a return of around 22%, while Over the past month, it has delivered an impressive return of nearly 50%, furthermore, it has achieved a remarkable multibagger return of 224% in the last three years.   

Currently, it is trading at Rs 245 on the BSE. Its 52-week highs and lows are Rs 256.20 and Rs 142.05, respectively. Currently, its market capitalization stands at Rs 1131.46 Crore.  

If we check the company’s financials during the recent quarter company’s revenue grew significantly by 138% from Rs 61.4 Crore to Rs 146.4 Crore. The operating profit of the company is Rs 28.2 Crore with an operating profit margin of 25.3%. Since the last two quarters, the company started maintaining operating profit from operating loss. The net loss for the Q4 FY23 is Rs 23.8 Crore.  

In FY23, annual revenue experienced a substantial increase of 75%, rising from Rs 229.9 Crore to Rs 401.8 Crore. The operating loss of the company stands at Rs 26.8 Crore, Furthermore, the net loss of the company amounts to Rs 16.3 Crore. For the last five years, the company is registering a net loss in its Profit and loss statement. The company’s return on capital employed (ROCE) is 1.98%.  

The most exciting point one should make is company’s book value is Rs 676 and the stock is trading in the Indian market is just around Rs 245 which is 0.36 times its book value. The debt mentioned on the balance sheet is just Rs 4 Crore. At the same time, Cash and Cash Equivalent is Rs 1438.   

In terms of ownership, the promoters hold 45.63% of the company’s shares, while foreign institutional investors (FIIs) and domestic institutional investors (DIIs) hold 3.71% and 0.12%, respectively. The rest owns by Public investors which comes to 50.55% as per the recent update.   

Company Overview  

63 Moons Technologies Ltd is engaged in providing computer programming, consultancy, and related services. Its segments include STP Technologies/solutions and Others. Its STP Technologies/solutions segment offers straight-through processing solutions and includes an integrated mix of various products, projects, and services incidental to it.   

The Others segment consists of various services for trading, procurement, process management, risk consultancy activities, shared business support services, information technology infrastructure sharing, non-banking financial company-related activities, and Internet telecommunication services and training.   

It has developed a range of financial market software that simplifies the trading and settlement of multi-asset and multi-currency products to enable any exchange to operate in local or cross-border markets. It provides end-to-end solutions for brokers. Its solutions cater to the equity, forex, commodity, and derivatives markets.