Paytm Q1 result preview: Share price jumps over 2%; brokerages recommend Buy - check price target

Paytm Q1, Paytm share price: Shares of Paytm witnessed a choppy trade on Thursday ahead of the June quarter result of One-97 Communications, the parent company of the mobile payments app. The stock jumped more than 2% in the morning session but surrendered the gains later. At the time of filing this report around 3 PM, Paytm share price advanced 2 per cent to trade at Rs 814 a piece on the NSE.   

Several brokerages believe the company will report improved numbers in the June quarter of the financial year 2022-23. With steady loan disbursements and new device addition, YES Securities expects Paytm to post healthy sequential growth in revenue.  

However, YES Securities noted that the Reserve Bank of India's embargo on customer additions for the Payments Bank on March 11, 2022, would have its impact.  

The brokerage said that overall growth in revenue from operations would be around 17.5 per cent quarter-on-quarter (QoQ), while over 100 per cent year-on-year (YoY). It forecasts an improvement in Payment Processing Charges (PPC) as a proportion of Payments Revenue at 72 per cent a metric QoQ.  

Global brokerage Goldman Sachs believes Paytm’s operating performance has consistently remained strong and forecasting a third consecutive quarter of around 90 per cent YoY revenue growth in Q1.  

The brokerage remains a Buy rated on Paytm with a target price of Rs 1,050 per share (almost 40% upside) and believes the current share price continues to offer a compelling entry point into India’s largest and amongst the fastest growing fintech platforms.  

Axis Capital initiated a Buy rating on Paytm seeing the share price growing to Rs 940 apiece, implying an upside of 25 per cent.  It said, “EBITDA should improve as the share of higher-margin financial services business increases in revenue mix and as scale benefits lead to lower cost ratios.”