Paytm stock continues upward trajectory; here's what to expect

The shares of Paytm have been in an upward trend since the announcement of its results for the quarter ended December 2022. The stock went up 5 per cent to hit a day's high of Rs 710.30 on the BSE, continuing its upward journey for the fourth straight session.

In December quarter, Paytm had EBITDA profitability of Rs 31 crore. The company continues to be a loss-making business at a consolidated level. The consolidated loss of Paytm was narrowed by nearly 50 per cent to Rs 392 crore in the quarter ended December 31, 2022, against a loss of Rs 778.5 crore in the year-ago period.

2 lakh crore or $15 billion was up 44 per cent YoY. The company said it saw continued growth in its loan distribution business with disbursements of Rs 3,928 crore or $480 million, up 327 per cent. In January, it disbursed 3.9 million loans, up 103 per cent.

The recent highs in the recent highs have put the focus on the shares of new-age tech companies. Paytm stock is down more than 30 per cent from its 52 week high of Rs 969, hit on February 10, 2022. It recovered over 54 per cent from its 52 week low of Rs 439.60, which hit on November 24, 2022, but it recovered more than 54 per cent from its 52 week low of Rs 439.60.

The stock ended up 15 per cent higher on Wednesday after Macquarie doubled-upgraded the Paytm stock to 'Outperform' from 'Underperform and raised its target price to 800 from Rs 450. Since our last target price cut, Paytm has positively surprised on the distribution of financial services revenue by a wide margin and has managed overall expenses and charges, it said.

It believes that more needs to be done on corporate governance by getting an independent non-executive chairman, more independent members on the board, etc.

In March 2022, this global financial major slashed its price target for the digital major Paytm, citing regulatory concerns including a falling probability of getting a banking licence. It started coverage on the stock in November 2021, with a target price of Rs 1,200, which was cut to Rs 700 and then slashed to Rs 450.

Goldman Sachs increased the target price of Paytm to Rs 1,150 from Rs 1,120 on the back of a stronger Q 3 FY 23 December 2022 quarter. Paytm's current share price is a compelling entry point into India's largest and one of the most profitable fintech platforms, it said.

It believes Paytm's revenue growth could accelerate to 47 per cent YoY in Q 4 FY 23 due to around 130 crore in UPI incentives.

What do technical charts show?

According to Osho Krishan, Sr. Analyst- Technical Derivative Research, Angel One Ltd, Paytm has made its first attempt to test the 200 SMA post the strong surge but failed to surpass the same convincingly. At present, it is near the sloping trend line of the recent two swing highs and until it surpasses the 650 -- 660 zone, timidity is likely to continue in the counter.

As far as levels are concerned, 570 -- 550 is likely to provide a cushion to any blip, followed by the strong support of 520. Krishan said that 650 -- 660 is likely to act as immediate resistance in a comparable period, followed by the immediate swing high of 720 levels.