Paytm share price rose more than 1 percent on Monday after the fintech major reported earnings for the quarter ended June 2024. ₹Each in BSE.
Paytm share price rose more than 1 percent on Monday after the fintech major reported earnings for the quarter ended June 2024. ₹Each in BSE.
Paytm’s parent company One97 Communications narrowed its consolidated net loss. ₹357 crores during April-June 2024 ₹It was Rs 644 crore during the same period last year.
Paytm’s parent company One97 Communications narrowed its consolidated net loss. ₹357 crores during April-June 2024 ₹It was Rs 644 crore during the same period last year.
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However, the net loss of the company increased compared to the loss ₹168 crore was reported in the March quarter.
Paytm’s revenue from operations rose 39.4% in FY24 ₹2,341 crore from ₹1,679 crore during the same period last year.
Paytm’s credit disbursement business surged 167% and delivered ₹14,845 crores worth of loan. According to a regulatory filing by One97 Communications, the overall number of loans on the payments platform grew by 51% to 1.28 crore.
Most brokerages have raised their target price on Paytm stock after healthy growth in business metrics. Here’s what the brokerages said:
CLSA
Paytm’s Q1 Ebitda ex-ESOP was marginally higher than CLSA’s estimate on in-line revenue but lower processing costs. Key business metrics were strong with 37% GMV growth and 18% QoQ increase in loan disbursements.
“Fixed expenses, ex-ESOP, rose 14% QoQ as the company continues to ramp up manpower. “We understand the need to capture growth opportunities, but we struggle to understand what the company will do with so many employees in five years,” CLSA said.
The global brokerage estimates its FY25-26CL core Ebitda at 9%-12% driven by healthy business growth and higher net take rates. Paytm is expected to generate free cash flow in the next few quarters.
It maintained a ‘buy’ rating on the stock and raised the target price ₹1,050 per share from ₹850 ago.
City
Citi noted that Paytm’s net payment margin is on the rise and ahead of estimates, helped by lower interchange costs.
According to Citi, the margin improvement led to continued expansion of Adjusted EBITDA. However, EBITDA expansion was partially offset by higher fixed cost overheads.
Citi has a ‘Buy’ rating on the stock and raised the target price ₹1,200 per share.
JM Financial expects Paytm to grow at a revenue CAGR of 38% over FY23-25E, with contribution margins expanding by 50%+.
It maintained its positive stance on the stock, benefiting from a strong ecosystem that Paytm’s cash burn has steadily declined and continued momentum in its loan disbursement business with better performance metrics.
The brokerage maintained a ‘buy’ rating and raised the target price ₹1,060 per share ₹855 ago.
Paytm reported in-line 1QFY24 with sustained momentum in GMV and strong growth in distribution. This, along with strong traction in subscription devices, led to healthy growth in total revenue. Steady improvements in operating leverage increased contribution margin to 56%.
Motilal Oswal Financial Services said Paytm’s adjusted EBITDA came in below its estimate, but the company is on track to achieve EBITDA breakeven by FY25.
“We believe consistent improvement in contribution margin and operating leverage will drive operating profitability. We value Paytm based on 17x FY28E EV/EBITDA and take a ~15% discount rate to FY25E,” the domestic brokerage house said.
It has a ‘Buy’ call and target price on the stock ₹1,000 per share, implying 4.7x FY25E P/Sales.
At 10:40 am, Paytm share price was trading 0.36% higher ₹846.60 on BSE.