Paytm share price surges 8%; brokerages remain upbeat about the stock
Paytm reported that average monthly transacting users rose 24% YoY to 9.2 crore for April and May. Paytm also said it was seeing growth in the distribution of postpaid and personal loans.
Shares of One 97 Communications (Paytm) surged over 8 per cent in intraday trade on BSE on Thursday (June 8), looking set to extend their gains into the second consecutive session. The stock opened at ₹735.50 against the previous close of ₹727 and rose 8 per cent to hit the intraday high of ₹785.50.
The stock has been witnessing buying after it reported healthy growth in key business parameters for the current quarter.
Paytm, in a BSE filing on Monday (June 5), said it continued witnessing the expansion of the consumer base with average monthly transacting users (MTU) at 9.2 crore for the quarter to date (average for April and May 2023), up 24 per cent year-on-year (YoY).
"We continue to see growth in the distribution of Postpaid and Personal Loans. We have partnered with large NBFCs and Banks and we continue to focus on the quality of loans distributed through our platform. We currently have seven lending partners and we aim to onboard three-to-four partners in FY24," said Paytm.
Besides, it said its leadership in payment monetisation continued in May, as subscription devices for payment devices like Soundbox and POS machines continued witnessing increased acceptance by merchants.
As per media reports, global brokerage firm BofA Securities has upgraded the stock to a ‘buy’, raised the target to ₹885, and said well positioned to continue to dominate the SME merchant landscape.
Brokerage firm Motilal Oswal Financial Services also gave a buy recommendation on Paytm stock with a target price of ₹900 as the brokerage firm expects a 26 per cent upside potential in Paytm shares.
In a report on June 2, global brokerage firm CLSA highlighted that Paytm has scaled up its loan distribution from nearly scratch to a quarterly run-rate disbursement level of ₹120 billion over the past eight quarters. The share of BNPL (buy now pay later) in total disbursements has been about 55 per cent in the past few quarters.
Paytm's consolidated net loss narrowed sharply to ₹168.4 crore in the fourth quarter of FY23, compared to a loss of ₹761.4 crore in Q4 of the previous year. The performance was aided by an increase in GMV, higher merchant subscription revenues, growth of loans disbursed, and full years’ UPI incentives reported during the quarter.
Its revenue from operations stood at ₹2,334.5 crore in Q4FY23, registering a growth of 51.5 per cent from ₹1,540.9 crore in Q4FY22 and up by 13.2 per cent from ₹2,062.2 crore.
In the last six months, Paytm shares have surged 51 per cent against a one per cent gain in the benchmark Sensex.
Disclaimer: The views and recommendations given in this article are those of individual analysts and brokerage firms. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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