Paytm shares near 52-week high after 20% surge in the last five sessions

Shares of One 97 Communications Ltd., parent company of payments aggregator Paytm Ltd. surged as much as 8% on Friday, extending their gains for the fifth straight session. The stock is now closing in on its 52-week high, post this five-day surge.

Shares of Paytm have risen 20% in these five trading sessions. The stock, on November 23, last year, had made a high of ₹927, before correcting over the next three months.

Regulatory action with regards to its Payments Bank had sent shares of Paytm on a further downward spiral, with the stock making an all-time low of ₹310, before reversing from those levels. The stock had turned positive on a year-to-date basis in October this year. 

Brokerage firm Bernstein maintained its "outperform" rating recently on Paytm but increased its price target on the stock to ₹1,000 from ₹750 earlier.

Bernstein wrote in its note that the discussions on Paytm have shifted from survival risks to a discussion of bull and bear case scenarios. It also sees a nearly 100% upside to its base case Earnings Per Share (EPS) estimates for Paytm.

In a bear case scenario though, Paytm's payment margins can come under pressure and loan disbursal growth may remain subdued, according to Bernstein.

Out of the 18 analysts that have coverage on Paytm, seven of them have a "buy" rating on the stock, six say "hold", while five have a "sell" recommendation on the stock.

Shares of Paytm are currently trading 7.1% higher at ₹905.6. The stock is still trading 58% below its IPO price of ₹2,150. Paytm made its stock market debut in 2021 and will also make its debut in the futures and options market next week.