Paytm Stock Forecast 2024: In the dynamic world of finance, Paytm, India’s powerhouse in payments and financial services, emerges as a beacon of potential, validated by the bullish outlook from JM Financial Institutional Securities. This leading domestic brokerage firm has recently expressed confidence in Paytm’s stock, fueled by the robust performance metrics revealed in its Q3FY24 earnings report.
A ‘Buy’ Rating with Ambitious Targets
JM Financial doesn’t mince words, recommending a ‘buy’ rating on Paytm stock and setting an ambitious target price of Rs 1,120 per share. The price might increase by almost 48% from its current market value, indicating the company’s confidence in Paytm’s growth prospects.
Pioneering Innovations and Financial Triumphs
Paytm’s legacy of pioneering QR, soundbox, and mobile payments takes center stage, demonstrating impressive operating profitability for the fifth consecutive quarter in Q3FY24. The company’s EBITDA before ESOP has surged to ₹219 crore, marking a substantial growth of Rs 188 crore compared to the previous year. Notably, Paytm’s PAT has shown improvement by Rs 170 crore year-on-year, reaching ₹222 crore.
A Vision for Sustained Growth
JM Financial projects a 29% revenue Compound Annual Growth Rate (CAGR) from FY23 to FY26, with sustained contribution margins of 50% or higher incrementally. It believes there is potential for Paytm to sustain high take rates in its payments business over time, the business has a constructive outlook on the company’s stock. Paytm’s belief in the unexplored development potential in the financial services industry is the source of this optimism.
Strategic Moves: Reducing Cash-Burn and Lowering Processing Charges
JM Financial notes a strategic reduction in cash-burn for Paytm, attributing it to the benefits derived from a robust ecosystem. Simultaneously, an increase in the distribution of high-ticket merchant and personal loans, driven by improved performance metrics, adds to Paytm’s strategic success. The persistent endeavor to decrease payment processing fees is regarded as a favorable indication, demonstrating Paytm’s flexibility and dedication to user-friendly financial solutions.
A Global Vote of Confidence
The positive sentiment surrounding Paytm extends beyond domestic borders, as global brokerage giants like Bank of America (BofA) and Goldman Sachs raise their target prices post the Q3FY24 earnings release. Dolat Capital maintains a favorable stance on Paytm, while Bernstein highlights the unchanged asset quality of Paytm’s lending portfolio, despite a slowdown in disbursal, as a major positive.
Axis Capital, Citi, and Macquarie: Echoing Confidence
Resilience in Cross-Sell/Up-Sell Opportunities
Citi underlines the resilience of Paytm’s payments-driven cross-sell/up-sell opportunities in fintech. This tenacity shows Paytm’s numerous revenue sources and contributes significantly to the company’s remarkable headline increase in sales and contribution earnings.
Axis Capital’s ‘Add’ Rating and Macquarie’s Acknowledgment
Axis Capital maintains an ‘add’ rating with a price target of Rs 860 per share, affirming the broad spectrum of Paytm’s growth potential. Macquarie, in acknowledgment of Paytm’s robust financial performance, surpassing estimates on higher revenues from financial services, payments, and commerce, further cements Paytm’s position as a financial force to be reckoned with.
Market Dynamics: Paytm’s Share Price and Recent Returns
As of Thursday, Paytm’s shares closed at Rs 763.9, representing a 1.35% increase from the previous day’s closing. The last two weeks have seen a commendable 11.46% increase, with an even more impressive 18.85% in the last month, according to BSE analytics. Paytm’s stock has demonstrated its volatile character in the market by striking a low of Rs 508.10 and a high of Rs 998.30 over the course of the last 52 weeks.