Last Updated: October 23, 2023, 14:30 IST
Paytm Shares: Shares of One97 Communications, which owns and operates digital funds firm Paytm, skid over 5 per cent to the day’s low of Rs 931.80 regardless of beneficial views from greater than a dozen brokerages following the September quarter earnings.
Fintech main Paytm narrowed its losses for the quarter ended September 2023 to Rs 290 crore in contrast with Rs 357 crore within the previous June quarter and Rs 571 crore within the earlier 12 months quarter. Revenue from operations through the reporting interval jumped 32 per cent 12 months-on-12 months (YoY) to Rs 2,519 crore. The similar stood at Rs 1,914 crore a 12 months in the past. EBITDA (earlier than ESOPs) additional improved within the second quarter to Rs 153 crore as in opposition to Rs 84 crore within the first quarter. Contribution revenue for the reporting quarter is up 69 per cent YoY to Rs 1,426 crore, with a contribution margin of 57 per cent.
Paytm shares might have greater than doubled from its all-time low of ₹438 earlier in 2023, however it nonetheless stays practically 55 per cent beneath its IPO worth of ₹2,150.
On a 12 months-to-date foundation, the inventory has rallied 80 per cent, outperforming benchmark Nifty 50, whereas it has risen 46 per cent within the final one 12 months.
While Yes Securities has maintained a much less-than-bullish ‘Add’ ranking on Paytm with a revised worth goal of Rs 1100, Motilal Oswal retained a ‘Buy’ view with a goal of Rs 1,160.
Meanwhile, world brokerage agency Bernstein, which had initiated protection on the inventory not too long ago, has an ‘Outperform’ ranking on the counter with a goal of Rs 1,100 per share. This implies a possible upside of 14 per cent from the present market ranges.
Adjusted EBITDA was barely beneath analysts’ estimates however Motilal continues to consider that Paytm will obtain earnings breakeven in FY25. The brokerage Motilal Oswal has revised its estimates barely upwards and expects Paytm to report EBITDA of Rs 790 crore by FY25 as in opposition to an earlier estimate of Rs 780 crore.
Motilal mentioned that constant enchancment in contribution margin and working leverage will proceed to drive working profitability.
Meanwhile, Bernstein mentioned the corporate continued to indicate robust progress within the second quarter. The private mortgage phase noticed muted progress, however the firm reported steady margins, progress towards profitability, and wholesome fee progress.
Overall EBITDA margin improved led by the next share of lending revenues, Bernstein mentioned. The fintech main additionally witnessed QoQ stabilisation of non-direct bills.
Ahead of Paytm’s Q2 numbers, Jefferies initiated protection on the counter with a ‘Buy’, citing the corporate’s elevated credit score enterprise and the monetisation of its giant eco-system. The world brokerage has a goal of Rs 1,300 per share on the inventory.
Jefferies mentioned the continued momentum in credit score originations and margin enlargement in funds will upfront profitability forward of market expectations. “In four quarters, Paytm will enter the global list of large profitable fintechs, and valuations are yet to reflect its changed profile.”
The overseas brokerage had additionally identified regulatory threat, provide stress from non-public fairness (PE) promoting, and deterioration of asset high quality, which is able to affect credit score enterprise progress as key dangers for the corporate.
