Paytm Share Price: JP Morgan sees Rs 560 per share upside in this fintech stock

Shares of One97 Communications, Paytm's parent firm, on Friday, traded in positive bias a day after crashing 10 per cent to the lowest since May. The stock declined 2.23 per cent to Rs 527.50 on the BSE and 2.38 per cent to Rs 526.90 on the NSE in morning trade a day after SoftBank divested 4.5 per cent stake in the firm for Rs 1,631 crore through an open market transaction. The counter, however, bounced back to trade in the green and made an intraday high of Rs 548.30, gaining around 1.50 per cent. 

Meanwhile, brokerage firm JP Morgan has maintained a rating of ‘Overweight’ on Paytm stock and sees an upside of 100 per cent. The brokerage firm has set a target of Rs 1100, estimating gains of Rs 560 per share. JP Morgan said that high quality investments will continue as the company is eyeing higher free cash flow generation.

This US-based financial services company and investment bank highlighted Paytm’s sustained focus on achieving its September 2023 target of Adjusted EBITDA getting breakeven.  

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One 97 Communications Chairman and Managing Director Vijay Shekhar Sharma, in his analyst conference call after Q2FY23 earnings announcement, reiterated company’s commitment to achieve its adjusted EBITDA breakeven target by CY2023.

Earlier on Thursday, three Foreign Portfolio Investors (FPIs) picked up shares in Paytm in bulk deals. BofA Securities Europe SA, Morgan Stanley Asia Singapore Pte and Societe Generale - ODI purchased a total of 1.81 crore shares of Paytm.

The stock has fallen nearly 20 per cent or by Rs 120 per share over the past 7-8 trading sessions. Investors have been selling their stakes in Paytm as the mandatory anchor lock-in period for the pre-offer investors ended on Tuesday.

Paytm Price Movement

Source: NSE

Intraday Chart

Souce: NSE

The company recently release its October operating performance data reporting 387 per cent YoY jump in loan distribution business aggregating to loan disbursements of Rs 3,056 crore. Consumer engagement was at its highest on Paytm Super-App with average monthly transacting users (MTU) at 84.0 million for the month of October 2022, up 33 per cent y-o-y, the company claimed in its filing to the exchanges.

There was also a 42 per cent Y-o-Y jump in merchant payment volumes (GMV) for the month of October at Rs 1.18 lakh crore.

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)