Shares in One97 Communications, the parent company of Paytm, rose over 2% on Friday, reaching a high of Rs 998.3 per share ahead of its Q2 results announcement. The increase was backed by strong performance expectations for July-September, driven by robust loan disbursals and credit business growth.
Global brokerage Jefferies initiated coverage on Paytm with a buy call and a target price of Rs 1,300, predicting over 34% potential gains and profitability in the next four quarters. Jefferies valued Paytm at 3.6x FY25 EV/revenue.
In addition, Motilal Oswal has projected a 36% YoY operational revenue growth to Rs 2,600 crore for Paytm. They also anticipate an adjusted EBITDA of Rs 180 crore and a significant net loss reduction to Rs 280 crore from Rs 570 crore in Q2 FY23, suggesting a buy call on the stock.
Over the past year, Paytm's shares have surged over 50%, with prices ranging from Rs 438.4 to Rs 998.3 per share. Paytm's net loss decreased YoY, indicating a positive trend in the company's financial health despite widening sequentially in Q1FY24.
According to InvestingPro data, Paytm has a market cap of $71.8M USD and a P/E ratio of 7.77. The company's revenue for LTM2023.Q2 stands at $55.28M USD, representing a growth rate of 1.59%. However, the quarterly revenue growth for FY2023.Q2 has decreased by 33.07%. Paytm's gross profit for LTM2023.Q2 is $23.14M USD, which constitutes a margin of 41.86%.
InvestingPro Tips reveals that the company's management has been aggressively buying back shares, which can be seen as a sign of confidence in the company's future. However, it's noteworthy that the company's revenue growth has been slowing down recently. Additionally, Paytm is a prominent player in the Financial Services industry, but analysts do not anticipate the company will be profitable this year. For more insightful tips and real-time metrics, consider subscribing to InvestingPro's premium services here.
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