Global brokerage giants Bank of America (BofA) and Goldman Sachs have raised their target prices on Paytm stock following the fintech giant’s impressive performance in Q3FY24. This comes on the heels of CLSA upgrading the stock to ‘buy’ and elevating the target price to ₹960 per share.
Paytm, India’s forefront payments and financial services company and a pioneer in QR, soundbox, and mobile payments, reported operating profitability for the fifth consecutive quarter in Q3FY24. The EBITDA before ESOP rose to ₹219 crore, marking a significant growth of Rs 188 crore from the previous year. The Profit After Tax (PAT) improved by ₹170 crore year-on-year, reaching (Rs 222 crore).
Bank of America revised its target price on Paytm to Rs 950 from Rs 905 per share, citing that the company’s Q3 earnings surpassed consensus estimates. The firm expressed confidence in Paytm’s momentum, particularly in the personal and merchant loan segments, reiterating a ‘buy’ rating. BofA emphasized optimism in Paytm’s fundamentals and its ability to scale up aggressively without taking balance sheet risks.
Goldman Sachs also adjusted its target price to ₹860, attributing Paytm’s broad-based growth across all segments to seasonality. The firm highlighted stable credit metrics and anticipated that Paytm is well-positioned for future improvements in the macroeconomic environment.
Domestic brokerage firm Dolat Capital maintained a positive outlook on Paytm’s stock, with a buy rating and a target price at Rs 1,320 per share. The firm noted the continued strength across segments, early success in high-ticket size loan distribution, and Paytm’s utilization of AI for product development and operational efficiency.
Bernstein maintained an ‘outperform’ rating with a target price at Rs 950, emphasizing the unchanged asset quality of Paytm’s lending portfolio despite a slowdown in disbursals.
Citi observed that Paytm’s Q3 adjusted EBITDA exceeded estimates at Rs 2.2 billion, emphasizing better-than-expected lending disbursals and increased blended lending take-rates. Overall, Citi highlighted the strong headline growth in revenues and contribution profits as indicative of Paytm’s resilience in the payments-driven cross-sell/up-sell opportunities in fintech.
Axis Capital maintained an ‘add’ rating with a price target at ₹860 per share, while Macquarie noted Paytm’s robust Q3 performance, citing a significant beat on EBITDA and quick scaling up of high-ticket personal loans.