This midcap fintech stock has fallen 59% from its IPO issue price: Should you buy, hold or sell?

Even after a stringent crackdown on the leading payments entity's Payment Bank arm early this year, the stock of Paytm has recorded a sharp recovery. After hitting a 52-week low of Rs 310 per share on May 9, the stock has come strongly and gained a sharp 186 per since then. Further adding to the gains, it topped its new 52-week high level of Rs 939 per share on November 25- taking the total gains to 203 per cent from those levels.

Now as Paytm is at a critical juncture with both growth oppotunities at hand coupled with regulatory concerns, investors need to be highly cautious of their investment take on the stock going ahead.

Also, from the company's IPO issue price of Rs 2,150 per share , the stock has cracked a sharp 59 per cent considering the previous close of Rs 886.

So, in this backdrop and citing other factors such as the significant improvement being priced in, UBS has continued with its 'neutral rating on the counter -with a target of Rs 1,000- implying gains of nearly 13 per cent.

ALSO READ: Bull and Bear case for Paytm 

Earlier the target pegged by the global brokerage was at Rs 490, implying nearly doubling of the target.

The brokerage believes next leg of business improvement has to be driven by revenue, as large part of its cost optimistion has already occurred. Also, the brokerage held that the company's FY25 revenue will be at par with FY24.

Alsp. the company's adjusted EBITDA is seen to breakeven in Q4 of the ongoing fiscal year. 

Meanwhile, the brokerage indicated that the stock has re-rated sharply, with regulatory issues resolved.