Paytm Shares: New-age tech stock Paytm has seen a 12 per cent rally in just 5 days. This comes at the back of a rally in tech stocks globally. Paytm share price has been rising continuously after dipping to its new low of Rs 510.05 apiece levels in May 2022. Paytm shares opened higher for the fourth successive session in Tuesday’s deals and went on to make its intraday high of Rs 723.60 per share levels on NSE, recording around 2 per cent rise in the intraday session.
Ravi Singh-Vice President and Head of Research-ShareIndia said: “Paytm stock is witnessing massive rally supported with huge volumes, taking cues from the high demand in the tech stocks globally. The stock may touch the levels of Rs 750 in this momentum. However, the outlook is still gloomy on the back of EBITDA losses and poor profit margins which may take a longer time to reach break-even.”
Trendlyne data shows that the average target price of nine analysts on Paytm is Rs 891, which signals an upside of 37 per cent from current levels. The One97 Communications share price had closed at Rs 620.25 on 22nd June 2022 on NSE, with the fintech stock logging more than 12.14 per cent rise in the last five days.
What Do Brokerages Say?
Global brokerage firm Citi has a target price of Rs 915. JP Morgan, on the other hand, has maintained its ‘overweight’ rating on the stock with a target price of Rs 1,000.
Macquarie, however, has a target of Rs 450 on Paytm as it believes profitability is still an uphill battle and that Ebitda losses may take 12 quarters to break even.
Santosh Meena, Head of Research, Swastika Investmart Ltd., said: “The counter is bottoming out after building a strong base at the 500 level. It is now witnessing a breakout of symmetrical triangle formation with strong positive divergence in RSI. It manages to close above its all-important moving averages where we can expect immediate targets of 870/990. On the downside, 650 should act as an immediate and strong support level.”
Earlier this month, JPMorgan in a reaport said that it sees Paytm at Rs 1,000, down from the earlier target of Rs 1,200. The target price for the counter was Rs 1,350 before that. Even the latest target price signals a potential 60 per cent upside in the counter.
JPMorgan has backed Paytm’s path to profitability, citing the reduction in Adjusted EBITDA loss with better cost controls are the key stock drivers for the stock.
The brokerage noted that improved profit markets set the stage for operating leverage from the second quarter.
Paytm IPO was launched in November 2021 at a price band of Rs 2080 to Rs 2150 per equity share. It was listed at a discounted price and has been nosediving since listing on BSE and NSE on November 18, 2021. Paytm’s share price today is around Rs 716, which is still near 67 per cent below its upper price band of Rs 2150 per equity share. Shares of Paytm had delivered a massive loss to investors after their listing in November last year. From the highs of Rs 1,955, the stock had tanked to a low of Rs 510.05, that’s a massive capital erosion of around 73.9 per cent.