Paytm Shares: Another brokerage gives ‘buy’ tag with target up over 64%

“Paytm calls for valuation and valuation quite distinct and distinct, especially given: management’s high growth aspirations calling for significant investment and cash burn, a rapidly evolving business model (in payments Proven leadership but monetizing it through financial services is still at an early stage, highly competitive landscape with low switching costs and major players with deep pockets are getting aggressive,” the brokerage note said.

Brokerage Buy Rating on Paytm Shares. Comes with a target price of 1,352 each, indicating a potential increase of over 64% from its current level. However, according to the brokerage, the expected monetization and adverse regulatory consequences through financial services trading are to act as major risks.

Besides, regulatory uncertainties along with some favorable initiatives and some adverse outcomes including revision of charges on payment instruments, vigilance on digital lending etc., ICICI Securities highlighted.

Earlier this month, data compiled by Bloomberg suggested that buy recommendations on Paytm’s operator One97 Communications Ltd exceeded sell ratings in the first week of February due to its disappointing listing. Nevertheless, a change in analyst sentiment may bring some comfort to investors who have seen Paytm shares fall by more than half of their value since listing.

For the third quarter ended December 2021, Paytm reports a consolidated loss of Rs. 778.5 crore in December 2021 quarter, widened from 535.5 crore in the year-ago quarter. However, its consolidated revenue from operations rose nearly 88 percent. to 1,456 crore 772 crores year-on-year (YoY).

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.