Paytm Shares Hit Upper Circuit for Second Consecutive Session: Broker Insights

Paytm shares surged to the upper circuit for the second consecutive session, driven by speculation about Adani Group's interest. Analysts project potential growth despite challenges, emphasizing ongoing market monitoring.

Paytm Shares Hit Upper Circuit

Second Straight Session:

• Paytm shares surged to the upper circuit of 5% for the second consecutive session on May 30.

• The stock saw a significant gain of 4.99% to reach ₹401.55 on the Bombay Stock Exchange (BSE), following the previous day's upper circuit.

Adani Group Speculation:

• The rise in Paytm's stock was attributed to reports suggesting Adani Group chairman Gautam Adani's interest in purchasing a stake in Paytm's parent company, One97 Communications.

• However, Paytm promptly issued a clarification dismissing the report as mere speculation.

• The company stated, "The Company is not engaged in any discussions in this regard."

Paytm Stock Performance

Market Capitalization:

• Paytm's stock rose by 5% to ₹377.50 on BSE, resulting in a market capitalization climb to ₹24,001 crore.

52-Week Performance:

• Notably, the stock had previously experienced a low of ₹310 on May 9 but reached a high of ₹998.30 on October 20.

Brokerage Firm Analysis

Dolat Capital's Perspective:

• Dolat Capital projects a potential upside of over 70% for Paytm's stock, with a target price of ₹650.

• The firm acknowledges Paytm's renewed focus on business growth and cost efficiency as positive signals.

• Although Dolat Capital adjusted its revenue estimates for FY25 and FY26, it maintains a 'Buy' rating on the stock, citing a potential sharper recovery from Q2 onwards.

YES Securities' Analysis:

• YES Securities revises its price target for Paytm to ₹450.

• The firm notes that the merchant payments business has shown growth in April and May after facing pressure.

• However, monthly transacting users (MTUs), crucial for consumer payments, have declined by 25% compared to January.

• However, once Third Party Application Provider (TPAP) commences, it is anticipated that MTU growth would pick back up.

Conclusion

Paytm's stock witnessed significant movement due to speculation surrounding the Adani Group's interest, leading to a surge in share price. While market analysts remain optimistic about Paytm's potential for growth, they also acknowledge challenges in certain business segments.

Investors will continue to monitor developments closely, especially in light of the company's strategic initiatives and market dynamics.