Shares of One 97 Communications, the parent company of Paytm, gains over 3% to intra-day high of Rs 672.90 on NSE after brokerage firm Emkay Global upgraded the stock’s rating from ‘Reduce’ to ‘Add’ and raised the target price to Rs 750 per share.
Emkay Global’s Upgrade and Outlook
Emkay Global’s upgrade comes with an optimistic outlook for Paytm’s future financial performance. The brokerage firm expects Paytm to turn EBITDA positive (excluding ESOP and UPI incentives) by the fourth quarter of FY25. Easing regulatory pressures and optimization of operating expenses are expected to play a key role in restoring the company’s profitability.
Another factor driving Emkay’s upgrade is Paytm’s loan distribution business, which management anticipates will gradually re-accelerate. Additionally, the brokerage and insurance distribution businesses, referred to as Pol, are scaling up and have already become profitable.
Emkay also noted that Paytm’s decision to sell its operationally heavy entertainment business during Q2 will likely boost its cash reserves. The company remains open to divesting other non-core businesses, further strengthening its financial position.
Paytm Receives FDI Approval for Payment Aggregator License
Earlier this month, Paytm’s wholly owned subsidiary, Paytm Payment Services Limited (PPSL), received approval from the Foreign Direct Investment (FDI) authority for its payment aggregator (PA) license. This regulatory clearance was announced through a filing by One 97 Communications, marking a significant milestone for the company’s payment services business.
Stock Performance and Price History
In terms of stock performance, shares of Paytm have shown a solid upward trajectory in recent months. As of September 23, Paytm’s stock has gained 17.49% in the last month, according to BSE analytics. Over the past three and six months, the stock surged by 58.40% and 61.86%, respectively, demonstrating robust growth.
However, over the last year, Paytm’s shares have declined by 23.40%, underperforming the broader market. During the same period, benchmark indices Sensex and BSE Financial Services rose by 28.66% and 26.83%, respectively.
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