Paytm share price rose over 2 per cent in intraday trade on BSE on Wednesday, looking set to extend gains into the second consecutive session, boosted by the company’s business updates for the month of August.
One97 Communications Ltd, the parent of Paytm, reported a 20 per cent year-on-year (YoY) growth in average monthly transacting users at 94 million in the July-August period from 79 million in the same period last year.
Besides, Paytm said in a statement that it disbursed loans worth ₹5,517 crore ($667 million) in August through its lending platform.
The company’s merchant payment volumes (GMV) increased by 43 per cent year-on-year to ₹3 trillion ($36.3 billion) in July-August 2023, up from ₹2.1 trillion in July-August 2022. Paytm continued to see an increase in GMV of non-UPI instruments like EMI and cards, according to the company’s statement.
Read more: Paytm records 20% rise in monthly users in July-August, GMV up 43%
Paytm share price has seen strong traction in the last six months and has significantly outperformed the equity barometer Sensex. The stock has gained about 44 per cent in the last six months against a nearly 9 per cent gain in the Sensex.
The stock hit its 52-week high of ₹939 on the BSE on August 25, 2023. It plumbed its 52-week low of ₹439.60 on November 24 last year. The stock has jumped 100 per cent from its 52-week low level.
Experts believe the stock still has steam left to go higher.
More upside possible
Brokerage firm Motilal Oswal Financial Services has a buy call on the stock, with a target price of ₹1,000, implying a 13 per cent upside potential.
The brokerage firm observed Paytm’s business momentum continues to be strong with robust growth in GMV (gross merchandise value) and disbursements. Motilal said this, coupled with strong traction in subscription devices, will lead to healthy growth in total revenue.
“We value Paytm based on 17 times FY28E EV/EBITDA and discount the same to FY25E taking a discount rate of nearly 15 per cent. We value the stock at ₹1,000, which implies 4.7 times FY25E P/sales,” said Motilal Oswal.
Global financial firm Citi, too, has a buy call on the stock. As reported by CNBC-TV18, Citi has a target price of ₹1,160 on Paytm.
“Paytm’s leadership in devices has several durable advantages and should persist,” CNBC-TV18 quoted Citi saying so.
While fundamental factors make Paytm an attractive long-term bet, technical factors are also favouring the stock for the short term.
Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers observed that in recent times, Paytm has seen positive momentum after hitting ₹750 and currently, it is trading near the ₹900 mark.
“On a weekly scale, if Paytm manages to sustain above ₹915 level then we may see fresh longs for a target of ₹1,000 and a stop loss should be placed near ₹860 level on a daily closing basis,” said Patel.
Gaurav Bissa, VP of InCred Equities, pointed out that Paytm has been consistently forming higher highs and higher lows on the weekly charts, suggesting the stock has been in a strong uptrend recently.
“The stock has witnessed multiple breakouts with incremental volumes which has been giving a strong push to the stock prices. It has been bouncing from a rising trendline support which has been restricting the fall in the last few months. It has recently witnessed a bullish ABC breakout follow through on point and figure charts on a daily timeframe with a vertical count around ₹1,150 level,” Bissa said.
“Investors can buy Paytm on declines towards ₹840-850 for the target of ₹1,100, keeping the stop loss at ₹780. Investors who have already bought are advised to hold the stock and ride the uptrend,” said Bissa.
For the April-June quarter of the current financial year (Q1FY24), Paytm reported a consolidated net loss of ₹357 crore, significantly less than the loss of ₹6,444 crore in the corresponding period last year. Revenue from operations during the same quarter rose 39.4 per cent to ₹2,341 crore, compared to ₹1,679 crore in the year-ago period.
Read all market-related news here
Disclaimer: The views and recommendations above are those of individual analysts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
“Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!
Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!
Download the Mint app and read premium stories
Log in to our website to save your bookmarks. It’ll just take a moment.
You are just one step away from creating your watchlist!
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
Your session has expired, please login again.
You are now subscribed to our newsletters. In case you can’t find any email from our side, please check the spam folder.
This is a subscriber only feature Subscribe Now to get daily updates on WhatsApp