Shares of Multi Commodity Exchange of India fell nearly 7% on Wednesday, November 4, following profit booking. Although the company reported strong second-quarter results, investors sold off the stock. A shift to new contracts and lower crude oil prices also impacted the shares, which remain up 50% this year.

Shares of Multi Commodity Exchange Of India (MCX) witnessed profit booking on Wednesday, November 4, even after it reported a good set of results in the second quarter.

The stock declined nearly 7% on Wednesday after rising just as much a day prior.

MCX's revenue in the September quarter increased 14% sequentially to ₹800 crore from ₹702 crore. Its net profit was up 10% ₹455 crore from the previous quarter, due to higher tax expenses, increasing 68% from ₹110 crore to ₹185 crore sequentially.

Its earnings before interest taxes depreciation and amortization (EBITDA) increased 24% to ₹611 crore from ₹494 crore in the prior quarter. Meanwhile, EBITDA margins expanded to 76.43% from 70.36% in the year-ago period, aided by lower SGF contribution.

MCX's Average daily turnover in the futures segment went up by 5.3% on a sequential basis to ₹62,819 crore, while its ADTO in the options segment rose by 21.3% from the June quarter to ₹12 lakh crore.

The Average Daily Turnover in the overall Futures & Options (F&O) segment surged by 20.4% quarter-on-quarter to ₹12.63 lakh crore.

Another factor contributing to the sell-off apart from profit booking is the fall in crude oil prices, which have cooled from nearly $115 last week to below $103 levels today. Shift to a new contract is also one of the factors behind the fall, but any drop in crude price volatility could be negative for trading activity on MCX, according to HDFC Securities.

HDFC Securities further stated that crude and bullion premium Average Daily Turnover increased by 12% and 25% respectively on a sequential basis, and now contributes to 58% of MCX's total premium.

MCX shares declined 6.8% to hit an intraday low of ₹3,252 per share on Wednesday. The stock is currently trading 5.3% lower on Wednesday at ₹3,303.2. The stock is up 50% so far this year.