Last Updated: February 21, 2024, 14:15 IST
Paytm shares continued to recuperate on February 21, hitting a 5 per cent higher circuit for the third straight session. In right now’s buying and selling session, the inventory locked at a 5 per cent higher circuit restrict at Rs 395 per share, marking the fourth consecutive day of a 5 per cent rally. Over these 4 days, the inventory has gained a complete of 21 per cent.
Factors For The Rally?
Several elements contribute to this renewed shopping for curiosity, together with the RBI’s deadline extension, constructive administration feedback, and up to date favorable developments, such because the Enforcement Directorate (ED) discovering no violation beneath the Foreign Exchange Management Act, a strategic cope with Axis Bank, and an ‘outperform’ score from Bernstein.
While it has recovered round 24 per cent from the 52-week low of Rs 318 hit on February 16, the fintech agency’s inventory remains to be buying and selling 48 per cent beneath the January 31 closing worth of Rs 761.20.
What Investors Need To Know
While a number of brokerages have downgraded Paytm inventory and slashed goal costs after the RBI motion, Bernstein stays bullish.
“Given the still depressed valuation and the removal of a major regulatory overhang, we see considerable upside and maintain our Outperform rating with a Target Price of Rs 600,” stated Pranav Gundlapalle of Bernstein, including that the regulatory actions are restricted to Paytm Payments Bank (PPBL). He expects One 97 to efficiently execute the operational modifications required to take away the dependency on PPBL with restricted lengthy-time period influence to their general enterprise.
With the PPBL’s merchandise corresponding to wallets and Fastags set to drop, the brokerage estimates a 5 per cent decline in fee GMV and the worst-case influence of 4 bps on the funds processing margin from 9 bps at present, if the economics for Paytm doesn’t change considerably from switching to a non-PPBL accomplice.
(*4*) Gundlapalle stated.
While Jefferies has moved Paytm to its listing of ‘Non-Rated’ shares, Morgan Stanley has maintained an equal-weight score with a goal worth of Rs 555.
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