Topics covered
- Paytm hits over three-month high; stock surges 36% in two months
- Paytm at near six-month high by over 6% as quarterly revenue surges
- Paytm shares gain 3% on strong Q1 operating performance
- Paytm shares climb 7% despite rising in Q1 loss, here’s why
- Paytm Hits Over 3-Month High, Surges Over 20% in a Month; What Should Investors Do Now?
- Stock Price History
- What Do Analysts Say?
Paytm hits over three-month high; stock surges 36% in two months
Shares of One97 Communications, the parent company of fintech company Paytm, reached a more than three-month high of Rs 739 as the stock increased 4% on the BSE in heavy volume trading on Thursday. The stock reached its highest price since March 11, 2022, during trading. The stock has increased 36% over the last two months and is now up 44% from the record low of Rs 511 it reached on May 15, 2022.
Paytm was trading at Rs. 737 at 10:55 AM, while the S&P BSE Sensex had increased by 0.43 percent. By the time this story was being written, 3.4 million equity shares had exchanged hands on the NSE and BSE, virtually tripling the counter’s trading volume.
However, despite its rapid growth over the previous two months, Paytm has underperformed the market, plummeting 34% in the past six months compared to the Sensex’s 12% decline. The stock is currently trading 66% below its share issue price of Rs 2,150. On November 18, 2021, Paytm made its debut on the stock exchange. On the day of its debut, November 18, 2021, it reached a record high of Rs 1,961.05, however, it has not yet reached its issue price.
Paytm’s overall gross merchandise value (GMV) increased significantly (over 101 percent YoY) to 2.96 trillion in the first quarter of fiscal 2022–23 (Q1FY23). With an average monthly transacting user (MTU) of 74.8 million for Q1FY23, up 49% YoY, consumer engagement is at its best on Paytm Super-App.
In comparison to Q1FY22, the total number of loans disbursed increased by 492% YoY, from 1.4 million to 8.5 million. In Q1FY23, the total amount of loans disbursed increased by 779 percent YoY to Rs 5,554 crore (from Rs 630 crore in Q1FY22). Disbursements for the lending industry are currently occurring at a run rate of Rs 24,000 crore annually. A scale-up in personal loans is causing an ongoing increase in average ticket size.
With more monetization channels spanning payments, commerce, and financial services than any of its rivals, Paytm is the top “fintech horizontal” in India. The capacity to drive monetization and revenues across a variety of categories at a lower CAC compared to peers is made possible by this.
“Thanks to device monetization in payments, cross-selling of financial services, ticketing recovery, and increased ad monetization, we anticipate Paytm to experience robust revenue growth across all of its business areas. We anticipate sales to increase by >40% CAGR over F22-26 to $2.8 billion and CMs to reach 44% by FY26E. We anticipate it to maintain the greatest sales and profit levels compared to its local, vertical, and international competitors “JP Morgan analysts stated in a recent study.
As long as the 20-DMA at Rs 674 is held on a closing basis, the current chart structure displays a positive bias. Below that level, the 50-DMA at Rs 630-odd level would serve as the next major support.
The weekly chart predicts that the stock can attempt the Rs. 770-or-so level on the upside, after which it can target the Rs. 807 trend line resistance.
Paytm at near six-month high by over 6% as quarterly revenue surges
The parent company of Indian digital payments giant Paytm, One 97 Communications Ltd, reported an 89% increase in its quarterly revenue on Monday, sending shares of the company up more than 6% to their highest levels in almost six months.
The company’s revenue increased from 8.91 billion rupees to 16.8 billion rupees ($211.16 million) through more monthly customers, extra payment methods, and loan disbursements.
Investors didn’t seem to react much when the company announced a bigger loss of 6.44 billion rupees in its quarterly statement on Friday after the market had closed.
In the Indian digital payments sector, Paytm competes with Walmart Inc.’s PhonePe and Google’s payment app. The company said it is on target to reach operational profitability by September 2023.
The dramatically enhanced gross margin print in the payments sector, which led to an expansion in contribution margins to 13 bps, was the noteworthy print in the results, according to a note from J.P. Morgan analysts on Monday.
The company’s processing costs, which are supported by China’s Ant Group and Japan’s SoftBank Group Corp, decreased by 10.4% to 6.94 billion rupees on a sequential basis.
According to a note from Macquarie analysts, “the management highlighted that it could negotiate better arrangements with their bank partners, and rationalised certain low margin online merchant accounts that resulted in cheaper payment processing fees.”
As of 0648 GMT, the company’s shares were up 6% at 830.5 rupees.
$1 is equal to 79.5600 Indian rupees.
Paytm shares gain 3% on strong Q1 operating performance
Shares of Paytm (listed as One97 Communications) gained 3 percent on Monday after the Vijay Shekhar Sharma-led firm reported a 492 percent rise in the number of loans disbursed through its platform in Q1 on a year-on-year (y-o-y basis). The number of loans rose to 8.5 million in the quarter ended June 2022, while the value of loans disbursed grew 779 percent y-o-y to Rs 5,554 cr ($703 million).
The price of Paytm stock increased today by 2.84 percent to Rs 718.95 from its previous BSE close of Rs 699.10. The price of the company’s shares is higher than the 200-day moving average but lower than the 200-day moving averages for the 5-day, 20-day, 50-day, and 100-day moving averages.
However, the stock dropped 46.98% in 2022 while increasing 17.97% in a single month. Paytm’s BSE market capitalization increased to Rs 46,118 crore.
2.36 lakh shares of the company were traded in total, resulting in a turnover of Rs 16.71 crore. On November 18, 2021, the stock reached a 52-week high of Rs 1961.05, and on May 12, 2022, it reached a 52-week low of Rs 511.
In just two months, Paytm stock has risen 40% from its 52-week low.
However, compared to its IPO offering price of Rs 1,955 on November 18, 2021, the large-cap stock is still down Rs 1,236.05 or 63.22 percent.
The company said that through its platform, it recorded disbursements in June at an annualized run rate of Rs 24,000 crore ($3 billion). The largest number of Paytm Super-monthly App’s active users was 76 million.
According to the company, customer engagement reached its peak on the Paytm Super-App, where average monthly transacting users (MTU) increased by 49% year over year to 74.8 million for the quarter ending in June 2022.
The loan company has performed better recently, according to Ravi Singh, vice president and head of research at Share India. The stock is strong on both its daily and intraday charts, and a strong uptrend is likely in the near future. The momentum indications point to a strong advance supported by high volume in the near future. The price of Paytm stock could reach Rs 750. A significant resistance at about Rs 760, though, could stop the surge.
“Paytm loan disbursements climbed 471 percent year over year in April and May to 5.5 million, or Rs 3,576 crore in the first two months of this quarter, marking an 829 percent growth over last year,” said Manoj Dalmia, founder, and director of Proficient Equities. The stock recently touched a 52-week low of Rs 510.1 but has since rebounded by more than 30%. As the stock nears a crucial price area from where it can start its upward movement with a target of Rs 800, a stop loss of Rs 677, and an entry at current levels, investors can keep or increase their positions in it.
Paytm shares climb 7% despite rise in Q1 loss, here's why
Almost 7% of Paytm’s stock increased on Monday as the Vijay Shekhar Sharma-led company reported an 88% increase in sales for the three months ending in June 2022. Paytm is listed as One97 Communications. After the company stated that it was still confident in attaining break-even by the September ’23 quarter and that it was still bullish on customer demand for platform usage and monetization, sentiment changed in favor of the stock.
Compared to yesterday’s BSE close of Rs. 783.65, Paytm stock increased 6.74 percent today to Rs. 836.5.
The price of the company’s shares was higher than the 200-day moving average but lower than the 200-day moving averages for the 5-day, 20-day, 50-day, and 100-day moving averages.
However, the stock dropped 37.62% in 2022 while increasing 19.14% in a single month.
On the BSE, Paytm’s market value increased to Rs 54,130 crore.
3.94 lakh shares of the company were traded in total, resulting in a turnover of Rs 32.32 crore. On November 18, 2021, the stock reached a 52-week high of Rs 1961.05, and on May 12, 2022, it reached a 52-week low of Rs 511.
In three months, Paytm stock has increased 63.69% from its 52-week low.
However, compared to its IPO offering price of Rs 1,955 on November 18, 2021, the large-cap company is still down by Rs 1,118.5 or 57.21 percent.
Comparing the first quarter to the same period last year, the company’s overall loss increased to Rs 644.4 crore from Rs 380.2 crore.
Paytm reported that its contribution profit, which includes promotional incentives but excludes taxes and marketing costs, increased by more than three times to Rs 726 crore in the June 2022 quarter from Rs 245 crore the previous quarter.
Operating revenue increased by 89% to Rs 1,680 crore in Q1 from Rs 891 crore in the quarter ending in June 2021.
ICICI Securities has maintained its “buy” call on the stock with a target price of Rs. 784 despite increasing losses in Q1.
As shown by its reported consolidated loss of Rs 650 crore in Q1FY23 being smaller than the loss of Rs 760 crore in Q4FY22, One 97 Communications Ltd (Paytm) continues to sequentially improve its margins, according to ICICI Securities.
Paytm’s rating was raised by YES Securities from “Reduce” to “Neutral,” with a new price objective of Rs 850.
“A number of reasons contributed to the improvement in Net Payments Margin: (1) The company’s ability to negotiate higher rates from banks was the primary factor in the improvement of Net Payments Margin. (2) Better transaction routing optimizations, particularly for wallet loading via UPI (3) Greater profitability in the online payments sector as a result of account rationalization. Numerous variables contributed to the improvement in contribution margin. The increase in the share of financial services revenue from 6% in the first quarter of FY22 to 16% in the first quarter of FY23 drove the improvement in contribution margin. (3) An increase in the proportion of commerce revenue (4) A QoQ stability in the percentage of revenue attributable to promotional cashback and reward programs and other direct costs.
Paytm Hits Over 3-Month High, Surges Over 20% in a Month; What Should Investors Do Now?
Shares of One97 Communications, the parent company of fintech company Paytm, reached a more than three-month high of Rs 739 as the stock increased 4% on the BSE in heavy volume trading on Thursday. Paytm was trading at Rs. 737 at 10:55 a.m., while the S&P BSE Sensex had increased by 0.43 percent.
Stock Price History
The price of the Paytm stock was the highest it had been since March 11, 2022. The stock has increased 36% over the last two months and is now up 44% from the record low of Rs 511 it reached on May 15, 2022.
Despite its rapid growth over the last two months, Paytm has underperformed the market, plummeting 34% in the past six months compared to the Sensex’s decline of 12%. The stock is currently trading 66% below its share issuance price of Rs 2,150. On November 18, 2021, Paytm made its debut on the stock exchange.
Paytm’s overall gross merchandise value (GMV) increased significantly (over 101 percent YoY) to 2.96 trillion during the first quarter of fiscal 2022–23 (Q1FY23). With an average monthly transacting user (MTU) of 74.8 million for Q1FY23, up 49% YoY, consumer engagement is at its best on Paytm Super-App.
In comparison to Q1FY22, the total number of loans disbursed increased by 492% YoY, from 1.4 million to 8.5 million. In Q1FY23, the total amount of loans disbursed increased 779 percent year over year to Rs 5,554 crore (from Rs 630 crore in Q1FY22). Disbursements for the lending industry are currently occurring at a run rate of Rs 24,000 crore annually.
What Do Analysts Say?
Yes, Securities anticipates a 17.5% QoQ increase in overall revenue from operations for Paytm. “With consistent loan disbursements and the inclusion of additional devices, we anticipate Paytm to report solid sequential revenue growth. On March 11, the RBI imposed a ban on new customers for the Payments Bank; this ban would have an impact, it was stated.
ICICI Securities predicts operating revenue growth of roughly 6% on a quarterly basis. The company’s adjusted EBITDA (EBITDA before ESOPs) should increase as a result of management’s focus on enhancing operating profitability, according to the statement.
About 78% of Paytm’s sales come from its payment and financial services sector, while 20% come from its commerce and cloud services division.
“Due to device monetization in payments, cross-selling of financial services, tickets recovery, and increased ad monetization, we anticipate Paytm to experience robust revenue growth across all of its business areas. We anticipate sales to increase by >40% CAGR over F22-26 to $2.8 billion and CMs to reach 44% by FY26E. According to recent research by JP Morgan analysts, it will continue to have the greatest revenue and profit levels among local vertical and international horizontal competitors.
The counter established a foundation at the 500 level as some value purchasing emerged followed by a period of wealth destruction, according to Santosh Meena, Head of Research, Swastika Investment Ltd. Currently, it is seeing a breakout of the important obstacle of Rs 700 with respectable volume, which could trigger a brief upswing into Rs 870/Rs 990 levels. 670 will serve as an immediate and robust support level on the downside.