7 hours ago
HomeMarket NewsSole Paytm 'bear' does not see upside despite potential positive triggers
Goldman Sachs has forecast a 27% year-on-year revenue growth in financial year for Paytm, with EBITDA more than doubling on a year-on-year basis. It has a target of ₹1,500 on the stock.
2 Min Read
Brokerage firm CLSA, the only one among the 23 analysts covering One97 Communications, parent company of Paytm, who has a "sell" recommendation on the stock.
In its note on Tuesday, July 21, CLSA retained its "underperform" rating on Paytm with a price target of ₹1,050. The price target implies a downside potential of 22% from Monday's closing levels.
CLSA's note comes after Paytm's first quarter results, that were reported after market hours on Monday. The company reported a strong surge in its net profit and also reported its highest-ever Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) figure.
The brokerage said that the acceleration in payments Gross Merchandise Value (GMV) to 31% from the mid-20s stood out, while financial services revenue also increased to mid-40s percent from high-30s percentage.
Due to higher operating expenditure, Paytm has trimmed Paytm's financial year 2027-2029 estimates by 2% to 3%.
"The recent run-up in stock price in anticipation of MDR on UPI returning, leaves no upside, even if it returns," the CLSA note said.
On the flip side, Goldman Sachs maintained its "buy" rating on the stock with a price target of ₹1,500.
The brokerage expects growth to remain elevated due to strong traction in merchant loan distribution, which has sustained, and a scale-up of consumer products such as postpaid.
Goldman Sachs has forecast a 27% year-on-year revenue growth in financial year for Paytm, with EBITDA more than doubling on a year-on-year basis.
Citi has also maintained its "buy" rating on Paytm with a price target of ₹1,560.
Citing media reports, which suggest that MDR maybe imposed on high-ticket large merchant UPO loans could be introduced, and Citi believes that this could add to 0.5-1 bps upside to net payment margin and 8% to 10% upside to financial year 2028 EBITDA margin estimates.
23 analysts cover Paytm, of which 17 have a "buy" rating on the stock and five others have a "hold" rating.
Shares of Paytm are fluctuating between gains and losses on Tuesday at ₹1,349.7. The stock had ended higher on Monday but continues to trade well below its IPO price of ₹2,150.
