On Thursday (June 8), shares of One 97 Communications (Paytm) shot up more than 8% during intraday trading on the BSE. It is likely that the company’s stock will continue its upward trend into the next trading day as well. In comparison to the previous day’s closing price of 727, the share price started the trading day at 735.50 and increased by 8% to reach a high of 785.50 throughout the trading session.
After reporting a solid rise in key business indicators for the current quarter, investors have started purchasing the company’s shares in response.
Paytm said in a BSE filing that it continues to see an increase in the size of its customer base. The company reported that its average monthly transacting users (MTU) had reached 9.2 crores for the quarter so far (the average for April and May 2024), which is an increase of 24 percent year-on-year (YoY).
According to the company, they have built strategic connections with important players in the NBFC and banking industry, and they are continuing to see growth in their distribution of Postpaid and Personal Loans. The organization is dedicated to ensuring that its loans are made available via its very own platform in order to maintain the greatest possible level of service quality. In addition, the firm said that they now have seven loan partners and that they want to enlist three to four additional partners by the time fiscal year 24 comes to a close.
In addition to this, it said that its leadership in payment monetization was maintained in the month of May, as subscription devices for payment devices such as Soundbox and POS machines kept observing growing adoption by merchants.
According to several sources in the media, the global brokerage firm BofA Securities has upgraded the stock to a ‘buy’ rating, increased the target price to 885, and said that the company is well positioned to continue to dominate the SME merchant market.
Motilal Oswal Financial Services, a brokerage company, has also given a buy rating on Paytm stock with a target price of 900. The brokerage business anticipates a 26% upside potential in Paytm shares, thus they have given the stock a buy recommendation.
Paytm has built up its loan distribution from almost nothing to a quarterly run-rate payout amount of 120 billion over the course of the last eight quarters, according to a study published on June 2 by the global brokerage company CLSA. In the most recent several quarters, the proportion of total disbursements that was comprised of BNPL (buy now pay later) transactions was about 55%.
Paytm’s consolidated net loss decreased dramatically to 168.4 crore in the fourth quarter of FY23, compared to a loss of 761.4 crore in the same period of the previous fiscal year. A rise in gross merchandise volume, an increase in merchant subscription fees, a rise in the number of loans given, and the reporting of full years’ worth of UPI incentives during the quarter all contributed to the improved performance.
Its revenue from operations amounted to 2,334.5 crores in the fourth quarter of the fiscal year 23 (Q4FY23), representing an increase of 51.5 percent when compared to the figure of 1,540.9 crores in the previous quarter and an increase of 13.2 percent when compared to the figure of 2,062.2 crores.
Shares of Paytm have increased by 51% over the last half year, compared to a 1% increase in the performance of the benchmark Sensex index.
