One97 Communications parent company of Paytm saw its shares gain more than 10 percent for the second session straight on Tuesday as it was trading at around Rs 612 levels. On Monday the scrip closed 5 percent higher. The buying revived after the company posted its Q3 results.
In Q3FY23, Paytm reported a total revenue of Rs 2,062.2 Crore, a jump of 42 percent Year on Year from Rs 1,456.1 Crore. The revenue growth was driven by continued platform expansion & increased monetization across businesses. From the September quarter, their revenue grew by 8 percent from Rs 1,914 Crore.
The company was able to narrow its losses to Rs 397.1 Crore in the quarter from Rs 789.6 Crore in Q3FY22. In the previous quarter, their losses stood at Rs 562.3 Crore.
The loan disbursal by the company spiked during the quarter. The personal loans grew by 468 percent YoY to Rs 2,931 Crore from Rs 516 Crore. The merchant loan disbursal recorded a growth of 285 percent to Rs 1,825 Crore from Rs 474 Crore YoY.
One97 Communications is the parent entity of Paytm, which is India’s leading digital ecosystem for consumers as well as merchants. It offers a range of digital payment and financial services including mobile advertising, marketing, and payments for merchants.
In the past six months, the shares have declined by more than 26 percent. Currently it is trading at a discount of more than 66 percent from its high of Rs 984.50.
Global brokerage firm Goldman Sachs reiterated its ‘Buy’ rating on the stock with a revised target price of Rs 1,150 per share, representing an upside of 89 percent from the current levels.
“On the back of 3QFY23 results, we lowered our FY23E-25E revenue estimates by up to 3%, due to continued mix shift towards UPI and weaker than expected cloud revenues. However, our EBITDA estimates see a sharp increase in better-than-expected cost control. We reiterate our Buy rating and believe Paytm’s current share price continues to offer a compelling entry point into India’s largest and one of the most profitable fintech platforms,” it said.
Written by Anoushka Roy
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