The shares of Multi Commodity Exchange of India Limited are under pressure at about 4 percent the day after the commodity exchange said in a filing that its Chief Technology Officer Shashank Sathe had resigned.
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Read Here | MCX shares drop most in 10 months after extension of software services contract, brokerage downgrade
The company had been renewing the software services contract they have with the current vendor 63Moons. But that contract expires in June 2023.
The main concern for MCX is regarding the implementation of the new tech platform by TCS. MCX was supposed to switch to TCS as a software service provider last year, but that did not happen and they extended the current contract with 63 Moons Technologies till June of 2023.
Additionally, the software support expense for Q3FY23 ballooned three times at Rs 68 crore as compared to Rs 22 crore in the previous quarter. And, this escalated software cost is expected to last for another two quarters as per analysts.
During MCX's Q3FY23 conference call before the CTO's exit, the management team tried to allay fears and seemed confident about launching a new platform in Q1FY24. They also revealed that more mock sessions were planned in the near term. While these announcements did provide some reassurance, it remains to be seen how the company will fare in the coming quarters.
Shares of MCX are trading 7.24 percent lower at Rs 1,379.95.
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