Home / Markets / Stock Markets /  Paytm share price: Another global brokerage 'double' upgrades stock's rating, raises target price

Major global brokerages have raised target price on Paytm shares after healthy Q3 numbers with another global brokerage Macquarie now joining the list as it has turned the tide in the company’s favour and has double upgraded the stock's rating to ‘Outperform’ from ‘Underperform’ and also raised target price of the shares to 800 apiece.

"Paytm has positively surprised on the distribution of financial services revenue by a wide margin and has also managed to control overall expenses and charges. At the time of listing, profit and free cash flow were not even a part of management’s discussion. However, we see a very visible change in approach of management to deliver profit, evidenced, we believe, by the core EBIDTA profitability that was reported recently. We raise our FY23–26E revenue estimates 33–51% and our TP to 800.00. We double upgrade the shares to Outperform from Underperform," said the report.

Paytm posted its first-ever quarterly operating profit as a listed firm and the company's losses also narrowed during the third quarter of the current fiscal (Q3FY23). The fintech company's net loss in the quarter through December narrowed to 392 crore as compared to 779 crore a year earlier whereas the leading digital payments brand's revenue from operations rose 42% to 2,062 crore.

Furthermore, about Paytm’s lending business, Macquarie said that it is now assured about the quality of loans. Earlier during the company’s earnings call, Paytm management had said that they now see a level of maturity in all of their lending products. The note said, “Our channel checks with some of the largest lenders/partners of Paytm reveal that the performance of post-paid (95%+ by volume) as well as personal loans continues to be pretty robust, and the company has now seen several repeat purchases/transactions over the past 12 months, which assures us of the quality of these loans."

Paytm shares have been in the upward momentum this week after reports suggested the government had banned dozens of Chinese rivals, news that emerged just days after the fintech giant reported narrower losses.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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