Q1FY26 debut record INR406 cr (+60% YoY) set the table.

The growth in revenue is heartening but margins were lower than expectation. Employee expense and SGF expense has been higher. Any particular one-offs in the quarter? Do we expect the expense run rate to remain high? Is the ~65% EBITDA margin sustainable?

Yes. So, thank you. I think that's a very important question. And this is, as always, Q1 over Q4 impact playing out here. In Q4, we did have certain one-off expenses. And as we look at really driving our growth significantly through launch of new products, increased number of participants to drive MCX business towards maturity and growth, we will continue to invest as required. So, I would say that last year, we had -- the efficiency that was delivered last year will continue to sustain. And at this stage, when we are in a growth phase, it will not be prudent to really say that we will be looking at further tightening the belt here. So, the focus is on growth while we do everything that we need to do to sustain the efficiency.

If you can put some guidance, this 65% margin that we have, do we think this number is sustainable? Or do we see this going downward or upward over the next 2, 3, 4 quarters?

Devesh, these margins could be a little under pressure, but we'll try to work on that because the volumes what we have seen in July are also a little weak. So, these margins are a function of revenue and expenses. So, while we can control the expenses, the revenue is depending on the volumes. So it can be under some pressure, but we'll have to see as the year progresses.

Anything on base metals delivery centres, sorting out or anything on co-location that you can share with us?

So, in terms of metals, I think there's been a lot of consultation activity with our stakeholders. There will be some announcements on optimization that we will be making soon. On co-location, as you know, this is completely in regulatory remit, so nothing much for us to say there.

Why is MCX not allowed versus equity exchanges for co-location? What's the rationale for SEBI to not give us co-location services?

I don't know Prayesh, it's a difficult question to answer here. So, we'll have to leave that with regulatory remit now.

How do you see tech cost going ahead? Are we mostly invested in technology for next 2 years or do we need additional investment? Also SGF — normalized SGF as percentage of revenue?

So let me take the tech cost question. So, we will continue to invest in technology. We have to continue to invest in technology as we broad base our products and continue to put our foot on the pedal with the kind of growth that we're looking at. So that's a given. Doing it more efficiently is really the question, and I think that's what I covered in the early part that we will continue to focus and deliver the kind of efficiency that we looked at on the technology side. So, will we invest, and will it mean another big bump up of cost, we don't expect so, that we will continue to invest, and we will do that in a manner that is done efficiently.

How are we working on the recent products or development, specifically electricity derivatives and the next new products in line for launch? Also, depreciation has been fluctuating in the last 3 quarters — where do we see stable levels?

Yes, Lavanya, so I think on the product side, we spoke about the launches we've had, both in bullion as well as electricity, cardamom. So, electricity contract was launched in June, and the cardamom contract in July, of course, just a few days back. We are also looking at quite a healthy pipeline of products. So, these were things that we've been -- we worked on few months back and slowly as these approvals keep coming in and we are able to then bring them to market with a certain timeline. We, of course, have to time the market so that we can't do multiple things at the same time, and we will have a calendar of launches playing out. I expect that this will be across categories. So, we have plans in the metal complex as well as in the agri side as we speak now and bullion also.

Depreciation has been fluctuating — where do we see stable levels?

Yes. So, Lavanya, depreciation depends on the tech investment that we do. And till the time there is fresh investment happening or assets are fully depreciated, this number is bound to change every period.

Staff costs — will be stable even in Q4? Are we expecting one more jump similar to last year?

With growth of the business, there will continue to be some growth in staff cost, yes. So, the business can't grow with flat staff cost at this rate. So that's what I said that whatever efficiency is there in the business, when we look at a full year basis, as of last year, we'll continue to retain that efficiency.

Premium to notional in July has come off meaningfully. Is retail participation going up leading to more people trading out-of-money contracts and structurally lower premium to notional? Will growth in notional not translate proportionally to premium growth?

To answer your second question regarding premium to notional, premium to notional is a result of various factors. It's just not trading out of the money. It's also about the volatility in the market. If you observe the beginning of the first quarter, there was heightened volatility because of global geopolitical situations. It has also investor behaviour. So naturally, it will keep changing from time to time. Having said that, we have been able to more or less maintain a consistent premium to notional. Of course, it would differ from product to product. So, it's very difficult to give you a color as to where premium to notional is headed. Having said that, we always try to increase participation on the exchange, and that should result in overall higher volumes.

On weekly expiry — anything from SEBI? And if you intend to launch, in which product segment — index options, bullion or crude or energy?

Yes, Sanket, nice question is what I can tell you. And see, we've been talking about the index options, right? So, when I spoke about this pipeline of products that we are going to put into the calendar, we do expect the index options to be a part of that. Now what really will be the kind of monthly, etcetera, is something that we will announce in due course. But I would expect that the general regulatory outlook towards weekly is fairly conservative. So, I think we should sort of bear that perspective in mind in what we can expect.

Like we pay product license fee to LME, is it a similar arrangement with IEX — same percentage or something different?

We do have an agreement with IEX giving us the rights to use their price. So, it's a very simple price that gives us a reference to the contract. Yes. So, I don't think we'll be able to share exact details here. But yes, we do have an arrangement. We do have an agreement on this.

Electricity futures — we've been waiting for this for quite some time. What are your internal goals or benchmarks to scale this up in the future?

Yes. So, I think we are also very excited, Chintan, about this contract because it's a completely new product space, and it's a very large market when it comes to India. There is also very stable spot exchange mechanism that exists. So, on the back of all that, I think we have launched the contract. We've seen a good pickup in the early days. In fact, the first month is August. The first month of the contract is August. So, the month now has opened, even though we launched in July to sort of warm the contract up. So, from the 1st of July, the sort of mechanisms really start playing out. So, there's a very nice healthy open interest of about 700 lots that's built up. So, I would say early indications are looking green. The expectation of the contract is positive. I think it will add to our energy segment. And we want to continue to build into that segment so that we build -- cover all energy products in the segment there. Any new product is going to take time to build out. Everything that we see today and the numbers we see have happened over years. So, what we want to look at here is early milestones to ensure that there is a trading book that is active and available, so that any producer or distributor or corporate is able to manage their price hedging mechanisms. So, it's been extremely positive, the kind of feedback we've had from corporates. We've had many industrial organizations, in fact, call up proactively wanting to understand more and starting to try how the contract works in any… Yes. So let me just finish this last line. In any industrial setup, nearly 30% to 40% of their expenses is energy and electricity. So, I think we are finding a lot of commercial corporate participation interest and nearly 50% of our current participation also is from that space.

Are you expecting this volume growth to continue?

I will also add that one is, of course, the macro aspects of what's happening, but I think there's also been a lot of very focused efforts and initiatives taken to create more energetic engagement, interaction, spreading the knowledge of why commodity derivatives matter and so on and so forth. I mean these will take time to play out overall. But I think everything sort of adds up into this space.

What is the average realization for the current quarter? And with regulators increasing scrutiny in derivatives market, are you seeing any near to mid-term regulatory or compliance headwinds?

So, in terms of average realization, now you will understand that it is true to label. So, there is no average realization. What we announced, there's a fixed fee for everyone, and that is the realization. So, there is no variability in the realization. And in terms of commodity markets, we are very small compared to the equity markets, and we continue to grow, and we see continued interest in people to participate here. See, commodities markets have a varied participants. So, you have a lot of hedgers, real users, exporters, importers, physical market participants primary producers and consumers coming into this market. So, you cannot equate it with equity markets where they're just issuers or investors or traders. Here, there are a lot of other participants. So, commodity markets actually serve a larger economic purpose.

While transaction fee charged for electricity futures is the same as other futures, would you be able to quantify in terms of volume or value of business expected from this contract for this financial year?

Yes. So, sorry, we won't be able to give that because that's something that we are tracking internally. But like I said, I think we're looking at milestones. We're looking at green shoots here. I already shared the data in terms of what our current open interest is looking like. So, the trend is as we've expected. The focus really is on early actions. The first -- we are just 2 days into the first month actually of the first contract. So, bringing in all the commercial participants and having them to actively participate is one of the primary objectives here.

You mentioned 50% electricity derivative participation is from corporates. Is the rest from capital market participants or are we seeing DISCOMs using this for hedging? Can we expect increased participation from DISCOMs over time?

See, 50% plus is coming from clients. Of that, I think we really wouldn't be able to say whether it's coming from what kind of participant, DISCOM and so on. But I think we do expect the public sector to take more time to come on Board. The early participation will come from private sector generators, and we are actively engaged with all of them. There is a lot of activity around solar generation and private distribution and so on and so forth. So, we have the open interest of 700 lots.

Participation in other segments — how has hedger participation in gold specifically evolved? Is it increased?

You are already aware of it. There's a significant contribution because when you look at it, you have to look from open interest when you are looking at hedgers. And when you are looking for other market participants, maybe you can look at the volume. In commodities like gold and other commodities, metals and other things, you could see a lot of participation in the hedgers, in terms of their contribution to the open interest, okay? So, in case of volumes, I think it is going to be distributed across many categories of market participants.