Shares of Paytm rallied for the third consecutive trading day. What's driving the stock?

 

Shares of One 97 Communications Ltd (Paytm) rose over 6% to ₹624 per share in early deals on BSE on Wednesday after the company shared its business update for the month of January 2023, during which its merchant payment volume ( GMV) was Rs. 1.2 lakh crore, a growth of 44% year-on-year (YoY). It disbursed loans worth ₹3,928 crore for the month of January 2023.

The stock rose for the third straight day after the fintech company posted its first-quarter operating profit as a listed firm and also narrowed its losses during the third quarter (Q3FY23) of the current fiscal. Moreover, leading global brokerages have raised target prices on the stock after Paytm's healthy Q3 numbers.

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626.5037.25 (6.32%)

Updated - 08 February 2023

644.90

high day

613.00

day less

4,05,055.00

Vol (BSE)


Paytm's net loss in the quarter through December narrowed to ₹392 crore compared to ₹779 crore a year ago, while the leading digital payments brand's revenue from operations rose 42% to ₹2,062 crore.

Brokerages such as Citi, CLSA, and Goldman Sachs have recommended Buy ratings while increasing target prices, while BofA maintained its 'Neutral' rating on the stock following the Q3 results.

“I am very happy to share that our company has achieved this milestone of EBITDA before ESOP cost profitability in the December 2022 quarter itself. That's three quarters ahead of our guidance. With our focus on growth and keeping a close watch on operational risk and compliance, I am confident that we will soon achieve our next milestone of becoming a free cash flow generating company," said the Founder and CEO (CEO) Vijay Shekhar Sharma said in a statement.

The company said in its business update on Wednesday that over the past few quarters, its focus has remained on payment volume that drives profitability for us, either through net payment margin or direct upsell potential. With a focus on creating additional payments monetization, the number of merchants accepting payments for payment instruments has reached 6.1 million, up 0.3 million from January.


According to a Bloomberg report, the stock is also rising on the back of reports that suggest India will ban 232 apps and websites, including Paytm's rival like Naspers Ltd-backed PayU's LazyPay.