Digital payment giant, One 97 communication or Paytm surged 2.84%, on Wednesday and hit a fresh 52-week high of Rs 864 on NSE. The stock has delivered around 19% returns in a month and 41% in a year and its market capitalisation stood at Rs 54,314 crore – a gain of Rs 1,499 crore in a day.
However, its share is still far away from its listing price. Paytm remained in pressure since its listing on November 18, 2021 and is still 56% far from its listing price and 61% from its issue price of Rs 2150. However, the stock has been in momentum recently, backed by better-than-expected quarterly results and strong guidance by the management.
Last week, Paytm reported a strong monthly performance aided by an upsurge in its subscription devices for payment devices. Around 75 lakh merchants are now paying for its devices like Soundbox and POS machines.
Consumer base continues to expand with average monthly transacting users at 9.2 crore for quarter to date (average for April & May 2023), up 24% (y-o-y).
Additionally, GMV for last two months stood at Rs 2.65 lakh crore. “Our focus over the past few quarters continues to be on payment volumes that generate profitability for us, either through net payments margin or from direct upsell potential”, said the company in a stock exchange filing.
Paytm is also likely to benefit from RBI’s First Loss Default Guarantee (FLDG) framework. Under FLDG, fintechs help banks and NBFCs recoup losses that occur when customers default on payments. Paytm has seven lending partners and aims to expand three to four partners by next year.
Sharad Avasthi, head of research (PCG), SMIFS said, “We believe that Paytm is in for some strong rating in the years to come as the company settles into existing businesses and start delivering bottom line growth. The company may report earnings of somewhere around 17 rupees in FY26.”
Key levels to watch
“Momentum indicator is showing positive divergence, which suggests a potential up-move in near term. Stock is doing well after the Rs 730 breakout. Further upside may be seen towards Rs 940-1000. This trend will remain positive as long as it holds Rs 750 level”, said Swati Hotkar, AVP Equity Technical, Nirmal Bang Securities. The scrip retraced from its high and settled at Rs 856.85 on NSE, on Wednesday.