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Synopsis : Paytm's stock rose 5% to Rs 377.50 on the BSE, increasing its market cap to Rs 24,001 crore. This rise occurred despite broader market corrections and followed a speculative report about potential stake acquisition by Gautam Adani, which Paytm later denied. The stock has experienced significant volatility, with a 46.17% decline over the past year and a 41.59% fall in 2024. Analysts remain optimistic, with Dolat Capital targeting Rs 650 and YES Securities at Rs 450, citing business growth and cost efficiency. However, recent earnings showed increased net loss and decreased revenue.
Paytm, listed as One97 Communications, saw its stock rise by 5% to Rs 377.50 on the BSE, boosting the company's market capitalization to Rs 24,001 crore. This increase was accompanied by a significant turnover with 1.61 lakh shares exchanging hands, amounting to Rs 6.06 crore. The stock also hit the upper circuit of 5% for the second consecutive session amid corrections in the broader market, trading at Rs 401.55 at one point.
This surge followed a speculative report suggesting that Adani Group chairman, Gautam Adani, might be considering acquiring a stake in One97 Communications. However, Paytm swiftly issued a clarification, labeling the report as mere speculation.
Despite these gains, Paytm's stock performance over the past year has been notably poor, with a 46.17% decline. The stock has fallen 41.59% in 2024 alone, hitting a 52-week low of Rs 310 on May 9, 2024, and a 52-week high of Rs 998.30 on October 20, 2023. The stock's beta value stands at 0.2, indicating low volatility.
From a technical perspective, Paytm's relative strength index (RSI) is at 50.2, suggesting the stock is neither overbought nor oversold. The shares are trading above the short-term moving averages but below the longer-term ones.
Analysts remain optimistic about Paytm's prospects. Dolat Capital has a price target of Rs 650, implying a potential upside of over 70% in the coming year. They attribute this optimism to Paytm's focus on business growth and cost efficiency, despite adjusting their revenue estimates downwards for FY25 and FY26. Similarly, YES Securities values the stock at Rs 450, based on a price-to-sales ratio of 2.8 for FY26.
In the latest quarterly results, Paytm reported a widened consolidated net loss of Rs 549.60 crore, compared to Rs 219.80 crore in the previous quarter and Rs 168.90 crore in the same quarter the previous year. Revenue from operations decreased by 3% year-on-year to Rs 2,267.10 crore. The company attributed the poor performance to disruptions from the UPI transition and an embargo on Paytm Payments Bank Ltd (PPBL).
Despite these challenges, analysts remain hopeful about Paytm's recovery, citing potential growth in merchant payments and stabilization in monthly transacting users. The company's strategic initiatives and market position continue to attract investor interest, highlighting its resilience in a volatile market.
Related Questions
1. What caused Paytm's stock to rise by 5% on the BSE?
Paytm's stock rose by 5% to Rs 377.50 on the BSE, increasing its market capitalization to Rs 24,001 crore. This surge was driven by a significant turnover with 1.61 lakh shares exchanged, amounting to Rs 6.06 crore, and hitting the upper circuit of 5% for the second consecutive session.
2. What was the impact of the speculative report involving Gautam Adani on Paytm's stock?
The surge in Paytm's stock followed a speculative report suggesting that Adani Group chairman, Gautam Adani, might be considering acquiring a stake in One97 Communications. However, Paytm swiftly issued a clarification, labeling the report as mere speculation.
3. How has Paytm's stock performed over the past year?
Despite recent gains, Paytm's stock performance over the past year has been notably poor, with a 46.17% decline. The stock has fallen 41.59% in 2024 alone, hitting a 52-week low of Rs 310 on May 9, 2024, and a 52-week high of Rs 998.30 on October 20, 2023.
4. What are the technical indicators of Paytm's stock?
From a technical perspective, Paytm's relative strength index (RSI) is at 50.2, suggesting the stock is neither overbought nor oversold. The shares are trading above the short-term moving averages but below the longer-term ones.
5. What are analysts' projections for Paytm's stock?
Analysts remain optimistic about Paytm's prospects. Dolat Capital has a price target of Rs 650, implying a potential upside of over 70% in the coming year. Similarly, YES Securities values the stock at Rs 450, based on a price-to-sales ratio of 2.8 for FY26.
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