Shares of One 97 Communications Ltd, Paytm’s parent, rose on Monday amid heavy volumes. The stock climbed 5.14 per cent to hit an intraday high of Rs 655.30 over its previous close of Rs 623.25. The scrip cut most of its gains and eventually settled the day at Rs 634.55, up 1.81 per cent.
A total of 4.69 lakh shares changed hands today on BSE, which was more than twice compared to Paytm’s two-week average volume of 1.95 lakh shares. Turnover on the counter stood at Rs 29.92 crore, commanding a market capitalisation (m-cap) of Rs 41,203.51 crore. On a year-to-date (YTD) basis, the stock has gained 19.06 per cent.
The stock was in focus today after a media report suggested that China’s Ant Group and Japan’s SoftBank Group Corp were looking to sell their stake in digital payments. In addition, another report claimed that the talks between Bharti Airtel and Paytm didn’t materialise.
On the earnings front, the digital financial services company has narrowed its consolidated net loss to Rs 392 crore in the third quarter (Q3) that ended December 2022 (FY23) against a net loss of Rs 778.40 crore in the same period a year ago. In addition, Paytm posted its first quarterly positive cash EBITDA of Rs 30 crore in Q3 FY23, three quarters ahead of company guidance (of September 2023).
AK Prabhakar, Head of Capital, IDBI Capital, said, “Not confident on the counter as it looks risk-taking. So, one needs to see the company’s path to profitability.” Paytm has been under pressure to turn profitable ever since its tepid listing in late 2021.
Ganesh Dongre, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, “Previously at the Rs 450-470 levels on the daily charts, the stock has already taken strong support, from where it has seen an awesome return of more than 30 per cent in a month only. On a weekly scale, MACD (Moving Average Convergence/Divergence) is still bullish in nature. So, at the current juncture, traders can book profit and can re-enter the stock at the downside support level which stands at the Rs 530-570 zone, keeping a stop loss placed at Rs 470.”
AR Ramachandran from Tips2trades said, “Paytm has strong resistance at 657 on the daily charts. A close below Rs 605 could lead to targets of Rs 560-535 in the near term.”
The stock traded higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter’s 14-day relative strength index (RSI) came at 58.23. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a negative price-to-equity (P/E) ratio of 17.28.
Yet, Paytm has an average target price of Rs 1,053, Trendlyne data showed, suggesting a potential upside of 65.80 per cent. The scrip has a one-year beta of 0.90, indicating low volatility.
Meanwhile, Indian equity benchmarks traded lower today, extending their losing run for the seventh straight session. The domestic indices were dragged by metals, technology and automobile stocks.
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