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Business News/ Markets / Stock Markets/  Paytm share price: Goldman Sachs gives 'buy' tag, predicts 30% upside in long term
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Paytm share price: Goldman Sachs gives 'buy' tag, predicts 30% upside in long term

Goldman Sachs believes that Paytm share price may go up to ₹1,250 apiece levels in long term

Paytm share price would be 405 lower from its issue price of ₹2,150 apiece even if it meets ₹1,250 per share target given by Goldman Sachs. (Photo: Bloomberg)Premium
Paytm share price would be 405 lower from its issue price of 2,150 apiece even if it meets 1,250 per share target given by Goldman Sachs. (Photo: Bloomberg)

Paytm share price has witnessed strong buying interest after making life-time low of 438.35 apiece on NSE. The then beaten down stock bottomed out at its record low and witnessed strong bottom fishing by value pickers. This value picking has paid dividend to those value investors as it has ascended to the tune of 935 apiece levels today after bottoming out from its record lower levels. 

In YTD time, Paytm share price has risen to the tune of 75 per cent. However, the stock is still way below its issue price of 2,080 to 2150 per equity share.

But, Goldman Sachs believes that Paytm share price has potential to continue uptrend. The global brokerage has predicted that paytm share price may go up to 1250 apiece in long term.

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Why Goldman Sachs is bullish on Paytm shares

On reasons for being bullish on Paytm shares, Goldman Sachs report says, "Paytm’s operating metrics have been surprising positively, and we are further raising our FY24-26E EBITDA estimates by 2-5%, with our target price moving to 1,250 (was 1,200). We forecast 30% YoY revenue growth for Paytm in 2QFY24 (Sep ’23; results on 20 October), at the higher end of our India internet coverage, with a 6.3% EBITDA margin (excl. ESOP; was 3.6% in 1Q). At US$200 mn in FY25 EBITDA, we continue to expect Paytm to be the most profitable company within India internet, and see the company turning net income positive in FY25 as a catalyst for the stock."

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"We see upside to both Paytm earnings (we are 6%-11% ahead of Visible Alpha consensus on FY25/FY26 EBITDA) and multiples (GS TP implied multiple of 47x FY26 P/E), as we expect continued momentum in lending and payments, with strong operating leverage in the business model. In addition, resolution of outstanding regulatory issues (customer onboarding ban on Paytm Payments Bank or online merchant onboarding ban), and/or inclusion of a bank as a lending partner could act as catalysts for Paytm," brokerage added.

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On suggestion to stock market investors in regard to Paytm shares, Goldman Sachs report said, "Investor pushbacks have been around negative impact on Paytm from a potentially adverse credit cycle, and while we expect Paytm to prioritize credit quality over growth, we expect FY25 financial services revenues to still grow 36% YoY (vs 61% in FY24). We reiterate Buy on Paytm with 30% potential upside."

Paytm IPO details

The initial public offering (IPO) of Paytm was launched in November 2021 at a price band of 2,080 to 2,150 per equity share. The book build issue listed on BSE and NSE at near 9 per cent discount as Paytm share price opened on NSE at 1,950 apiece levels and it listed on BSE at 1,955 per share levels. The stock went further deep and continue to slide for near one year after listing. It bottomed out at the end of November 2022 after making its life-time low of 438.35 apiece, around 80 per cent below its upper price band of 2150 per equity share. Even if Paytm share price meets the given 1250 per shaer target given by Goldman Sachs, it would be near 40 per cent below its upper price band of 2,150 apiece.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
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Published: 16 Oct 2023, 03:27 PM IST
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