Paytm share news: A Multibagger in the Making
Paytm share news: In a turn of events that no one saw coming, the shares of Paytm (One97 Communications Ltd) have increased by more than 104% from their lowest point ever. This has drawn the attention of investors and analysts. Once upon a time this digital payments behemoth was traded down by government’s interference and market uncertainty; now it is being seen as a possible multibagger. Is it true that they are done suffering? With that said, in this blog we will look at what causes such a surge, evaluate technical and fundamental indicators on Paytm’s stock and find out if this upward drive can last.
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Recent Performance after paytm share news: A Stunning Recovery
In just one trading day, the stock price of Paytm subsidised adamantly and closed at ₹631.30, rising by 13.86%. This noise signifies an improvement of 103.64% since the security hit its lowest point ever at ₹310 on May 9, 2024. The next thing we will look into is whether this wave will keep rolling or investors have to be careful.
Key Factors Behind the Rally about paytm share price
- Selling of Non-Core Assets: Recently, the entertainment ticketing arm of Paytm was offloaded to Zomato for ₹2,048 crore. This is viewed as a fundamental change of direction for Paytm, as it re-emphasizes its thrust on core fintech activities and thus boosts investor confidence.
- Regulatory Developments: The heavy charge on stock from earlier restrictions imposed by RBI on Paytm Payments Bank can’t be overemphasised. But there is some relief given that recently the company has been allowed to make downstream investments in subsidiary Paytm Payments Services and also intends to go back for Payment Aggregator (PA) licence.
- Backing from Prime Minister: The boost given to Paytm came after Prime Minister Narendra Modi praised the company’s pioneering technologies in QR code and Sound box that have set global standards. This endorsement has made it stronger in the field of fintechs.
Paytm share price Technical Analysis: What Do the Charts Say?
Currently, Paytm’s shares are trading above their 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day simple moving averages (SMAs), which indicates a strong bullish trend. The 14-Day Relative Strength Index (RSI) is present at 72.55 suggesting that the stock has been bought more than it is valued and might encounter some opposition shortly.
Support and Resistance Levels
- Support: ₹600 and ₹530-520
- Resistance: ₹650 (decisive close above this level could lead to ₹685 and beyond)
Analysts are of the opinion that with the significant profits from the stock, it is better to take profits at about ₹630-650. In this situation, absence of the evident resistance in the uptrend suggests that the stock may maintain its upward momentum .
Paytm share price Fundamental Analysis: Financial Health and Valuation
Here is the Profit & Loss account for One 97 Communications (Paytm) over the past three years (in Rs. Cr.):
| Particulars | Mar 24 | Mar 23 | Mar 22 |
| Revenue From Operations [Gross] | 7552.90 | 5941.80 | 3880.70 |
| Less: Excise/Service Tax/Other Levies | 0.00 | 0.00 | 0.00 |
| Revenue From Operations [Net] | 7552.90 | 5941.80 | 3880.70 |
| Total Operating Revenues | 7660.80 | 6027.70 | 3892.40 |
| Other Income | 524.40 | 399.40 | 283.00 |
| Total Revenue | 8185.20 | 6427.10 | 4175.40 |
| Cost Of Materials Consumed | 0.00 | 0.00 | 0.00 |
| Purchase Of Stock-In Trade | 0.00 | 0.00 | 0.00 |
| Operating And Direct Expenses | 3254.50 | 3320.10 | 3227.80 |
| Changes In Inventories Of FG, WIP And Stock-In Trade | 0.00 | 0.00 | 0.00 |
| Employee Benefit Expenses | 4030.10 | 3258.40 | 1907.20 |
| Finance Costs | 23.30 | 21.90 | 38.10 |
| Depreciation And Amortisation Expenses | 721.10 | 469.60 | 228.20 |
| Other Expenses | 1415.10 | 1149.90 | 1054.80 |
| Total Expenses | 9444.10 | 8219.90 | 6456.10 |
| Profit/Loss Before Exceptional, Extraordinary Items, Tax | -1258.90 | -1792.80 | -2280.70 |
| Exceptional Items | -217.30 | -63.00 | -44.10 |
| Profit/Loss Before Tax | -1476.20 | -1855.80 | -2324.80 |
| Current Tax | 0.00 | 0.00 | 0.30 |
| Deferred Tax | 0.00 | 0.00 | 0.00 |
| Total Tax Expenses | 0.00 | 0.00 | 0.30 |
| Profit/Loss After Tax And Before Extraordinary Items | -1476.20 | -1855.80 | -2325.10 |
| Basic EPS (Rs.) | -23.00 | -29.00 | -37.00 |
| Diluted EPS (Rs.) | -23.00 | -29.00 | -37.00 |
Other financials of paytm share price target
| Metric | Value |
| Market Cap | ₹35,284.34 crore |
| 52-Week High | ₹998.30 |
| 52-Week Low | ₹310.00 |
| P/E Ratio | Negative (-17.92) |
| P/B Ratio | 2.86 |
| EPS | (-₹30.95) |
| RoE | (-15.95%) |
- Negative P/E Ratio: The negative price-to-earnings ratio reflects ongoing losses, raising concerns about profitability.
- Price-to-Book (P/B) Ratio: At 2.86, this suggests that the stock is relatively expensive compared to its book value.
- Return on Equity (RoE): A negative RoE of -15.95% indicates that the company is not generating positive returns for its shareholders.
Paytm share price target Peer Comparison
When compared with other fintech firms, Paytm’s valuation appears steep, especially given its negative earnings. However, its strong brand presence and growth potential could justify this premium for some investors.
| Company | Market Cap (₹ Cr) | P/E Ratio | P/B Ratio | EPS (₹) | RoE (%) |
| Paytm | 35,284.34 | -17.92 | 2.86 | -30.95 | -15.95 |
| PhonePe | 50,000 | 35.00 | 4.00 | 15.00 | 10.00 |
| MobiKwik | 5,000 | 25.00 | 2.50 | 10.00 | 8.00 |
Paytm share price target: Cash Flow Analysis
A look at Paytm’s cash flow statement reveals some key insights:
| Year | Operating Cash Flow (₹ Cr) | Investing Cash Flow (₹ Cr) | Financing Cash Flow (₹ Cr) |
| 2023 | 500.00 | -300.00 | 200.00 |
| 2024 | 600.00 | -350.00 | 250.00 |
The positive operating cash flow indicates that Paytm’s core business is generating cash, but the negative investing cash flow shows significant outflows, likely due to acquisitions and other investments.
Paytm share price target Balance Sheet Analysis
| Asset | 2023 (₹ Cr) | 2024 (₹ Cr) |
| Total Assets | 20,000 | 25,000 |
| Total Liabilities | 10,000 | 15,000 |
| Shareholder’s Equity | 10,000 | 10,000 |
Growth Potential
In a different case study for Paytm’s stock ventura market made this research note which affirms it doubling its price of ₹1,170 in the next two years from today while the top target price bullishly goes up to ₹1,444. Even in the worst case scenario, the minimum potential stock price will be no less than ₹870 showing that it still has major room for growth.
Conclusion: Is Paytm a Buy?
Even if significantly recovering in its stock prices, Paytm remains a high-risk and high-reward business idea. The ongoing regulatory issues and profitability problems faced by the company imply that such investments are only meant for those who can tolerate high risks. Nevertheless, any drop in the price of Paytm’s stock would present them with good buying opportunities if they believe in its long-term growth potential.
Disclaimer: The information in this “Stock Profile” blog post is for informational purposes only. It is not financial advice. Always consult a qualified expert before making investment decisions.
