1 week ago
Paytm Shares Surge 33%: Profit Booking or More Upside?
Paytm’s shares have gone up by 33% in one month.
Its revenue also grew strongly in the April-June quarter.
Paytm said more payment activity and more merchant subscriptions helped its business.
Its Soundbox devices and financial-services products also contributed to growth.
One analyst said some investors may want to sell part of their holdings to secure profits.
Bernstein believes the shares could rise further and increased its target price to Rs 2,200.
Bernstein expects possible fees on some UPI transactions to improve Paytm’s future earnings.
Another analyst warned that the stock is already overbought and could fall if it closes below Rs 1,656.
Paytm shares have risen 33% in one month, prompting debate over profit-taking and further gains.
Revenue from operations increased 28% year over year to Rs 2,448 crore in the April-June quarter.
Paytm attributed growth to higher payment activity, merchant subscriptions, Soundbox devices and financial-services distribution.
Bernstein maintained its Outperform rating and raised Paytm’s target price to Rs 2,200 from Rs 1,500.
Analysts said the stock is bullish but overbought, with resistance at Rs 1,728 and support at Rs 1,656.
- Who
- Paytm, Bernstein, Kranthi Bathini of WealthMills Securities and AR Ramachandran of Tips2trades.
- What
- Paytm shares rose 33% in a month as the company reported revenue growth and analysts offered differing views on the stock’s outlook.
- Where
- The article does not specify a location; it discusses Paytm and UPI transactions.
- When
- The financial results cover the April-June quarter; the share performance refers to the preceding month, with no specific dates provided.
- Why
- Revenue grew through higher payment transaction volume and value, merchant subscriptions, Soundbox devices and financial-services distribution; possible future UPI transaction fees also supported Bernstein’s outlook.
Profit Booking View
Further Upside View
What investors should do
Profit Booking View
Kranthi Bathini said investors who bought at lower levels may consider taking some profits to recover their initial investment while retaining the rest.
Further Upside View
Bernstein retained its Outperform rating and raised its target price to Rs 2,200, above Paytm’s Rs 2,150 IPO price.
Near-term share outlook
Profit Booking View
AR Ramachandran described the stock as bullish but overbought and advised investors to keep booking profits.
Further Upside View
Bernstein’s revised valuation suggests potential for additional gains if its assumptions about Paytm’s future earnings prove correct.
UPI transaction charges
Profit Booking View
The potential MDR proposal remains under discussion, so investors may view the projected benefit as uncertain.
Further Upside View
Bernstein has included possible MDR on some UPI transactions from FY28E in its base case, estimating a 3-4 basis-point improvement in net payments margins and a 30% increase in FY30E EPS.
Key facts
- One-month share performance
- Paytm shares rose 33%.
- April-June revenue
- Revenue from operations was Rs 2,448 crore.
- Year-over-year growth
- Revenue increased 28% from Rs 1,918 crore a year earlier.
- Bernstein rating
- Outperform.
- Bernstein target price
- Raised to Rs 2,200 from Rs 1,500.
- Technical resistance
- Rs 1,728.
- Technical support
- Rs 1,656; a daily close below it could trigger a fall toward Rs 1,538, according to AR Ramachandran.
Quotes
Kranthi Bathini
Equity strategist at WealthMills Securities
“Paytm's stock is bullish but overbought on daily charts with next resistance at Rs 1,728. Investors should keep booking profits as a daily close below the support of Rs 1,656 could trigger a fall towards Rs 1,538 in the near term.”
businesstoday.in
“Investors who have entered around the lower price levels may consider taking some profits to recover their initial investment, while retaining the remaining holding.”
businesstoday.in
Sources
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