On Friday, Paytm's share price witnessed a notable surge over 4%, marking the third consecutive session of upward momentum and reflecting a positive market sentiment. The stock price of One 97 Communications, Paytm's parent company and a prominent players in digital payments, reached an intraday high of ₹809.45 per share on the BSE, registering a significant increase of 4.8 per cent. Notably, the stock had already gained over 6 per cent in the previous session.
In the past two trading days, the fintech company's stock experienced a remarkable surge of 11 per cent, reaching its highest level since August 22, 2022. The stock has rebounded by 79 per cent from its 52-week low of Rs 439.6, which was reached on November 24, 2022. This recent upward momentum showcases the strong recovery and positive investor sentiment surrounding the company's shares.
The rally in Paytm shares price follows an upgrade after the company got a ratings upgrade from Bank of America Securities as it identifies a more favorable risk-reward scenario for the stock.
The upgrade from 'Neutral' to 'Buy' by BofA Securities includes a revised target price of Rs 885 per share, up from the previous Rs 780. The decision to upgrade Paytm is supported by the company's robust revenue momentum and expected benefits from operational leverage.
The Bank of America Securities said in a report, “We expect Paytm’s momentum in BNPL (buy now pay later)/merchant lending to continue, albeit at a slower pace, leading to 34 per cent revenue CAGR from FY 23–26.”
Paytm has announced that the company continues to see an ongoing growth in the distribution of postpaid and personal loans. Through partnerships with prominent non-banking financial companies (NBFCs) and banks, the company maintains its emphasis on maintaining the quality of loans provided through its platform. Currently, Patym has establish collaboration with seven lending partners, and further aims to onboard 3-4 partners during the fiscal year 2024.
According to analysts, the new technologically-advanced platform that emphasizes artificial general intelligence (AGI) holds significant potential as a valuable lever for future growth. Additionally, the increased monetization of the Unified Payments Interface (UPI) platform and introduction of credit cards within UPI, could result in positive surprises in the near future.
During the quarter end of March 2023, the comapany consolidated a net loss sharply narrowed to Rs 168.4 crore from Rs 761.4 crore in Q4 of the previous period. The company's revenue from operation increased to 51.5 per cent to Rs 2,334.5 crore in Q4FY23, from Rs 1,540.9 crore in Q4FY22.
