Paytm, one of the biggest wealth destroyers, managed to attract investors on Wednesday after founder and CEO Vijay Shekhar Sharma assured investors that the fintech major is committed to building a successful and profitable company, which can create long-term value for shareholders. However, market analysts cautioned investors not to jump the gun yet and wait till the firm’s business fundamentals improves further.
Sharma’s views came while announcing Paytm’s operating metrics for the fourth quarter. The company said the number of loans disbursed through its platform grew 374 per cent year-on-year (YoY) to 6.5 million loans in Q4 FY2022, while the value of loans disbursed was Rs 3,553 crore, up 417 per cent YoY.
The offline payments business has accelerated by 90,000 devices this quarter, taking the total number of deployed devices to 2.9 million in three years. Paytm further added that it presently deploys about 1,000 devices per day. They also expect a rise in the number of merchants eligible for loans.
The average monthly transacting users (MTU) of Paytm Super App for the quarter has also grown 41 per cent YoY to 70.9 million.
Moreover, there has been over 104 per cent year-on-year increase in the total merchant payment volume (GMV) for the fourth quarter of FY 2022 at Rs 2.59 lakh crore.
In a letter to shareholders, Sharma further said, “Paytm should be operating EBITDA breakeven in next six quarters (ie EBITDA before ESOP cost, and by the quarter ending September 2023), well ahead of estimates by most analysts. We are going to achieve this without compromising any of our growth plans.”
Following the development, shares of Paytm traded 5.87 per cent higher at Rs 645 at around 12.40 (PM). At the current market price, shares of the company are down 70 per cent against the issue price of Rs 2,150.
While sharing his advice with investors, Santosh Meena, Head of Research, Swastika Investmart said, “Some investors are finding it attractive at current levels due to its brand value, however, there are still uncertainties about the timing of its profitability whereas there is no leadership in any particular business. We are expecting some recovery in this counter due to bargain buying where we can expect Rs 770-Rs 870 levels in the coming days. However, conservative investors should completely avoid this stock.”
Ajit Mishra, VP-Research, Religare Broking is of the opinion that the present rebound could be used to exit the stocks instead of infusing fresh investments in it.
“Sentiment has improved as far as Paytm is concerned. Volumes also have increased on bourses. However, investors should utilise the rebound to exit stocks. On the other hand, new investors should wait till the time fundamentals get better,” he said.
Also read: Paytm shares zoom 6% on Q4 business update
Also read: Vijay Shekhar explains why Paytm shares are down; expects EBITDA to breakeven soon
