Paytm’s Stock Performance
Despite a significant downturn in the broader market, Paytm’s shares have demonstrated impressive resilience, maintaining a price above the Rs 1,000 mark. On Tuesday, while the mainstream market experienced a decline of over 1%, the fintech company’s stock rose by more than 3% before settling slightly lower. A notable factor contributing to the stock’s surge was the recent divestment of Paytm’s stake in PayPay Corp, a Japanese digital payments firm. Just last week, following the announcement of this stake sale for over Rs 2,364 crore to SoftBank, Paytm’s shares rose by over 3% as investors reacted positively.
Profitability Gains and Market Reactions
Paytm recently reported its first quarterly profits in Q2FY25, with a profit figure of Rs 928 crore. This reported gain, although primarily attributed to the one-time sale of its movie ticketing and events division to Zomato, has led many analysts on D-street to adopt an optimistic outlook towards the stock. Previously, earlier this year, the company’s stock had suffered a considerable drop of over 50% following a ban imposed by the Reserve Bank of India on its banking arm, Paytm Payments Bank Ltd. However, in recent months, the stock has rebounded impressively, emerging as a multibagger within a span of just five months.
Yearly Performance and Recent Rally
On a year-to-date basis, Paytm shares have experienced a remarkable increase of 57% on the National Stock Exchange (NSE). The last six months have been particularly rewarding, with the stock delivering returns exceeding 140% on the NSE. As of Tuesday, Paytm’s share price finished at Rs 1,016.20, reflecting a nearly 1% increase. The stock has saw gains for three consecutive days, partly fueled by the successful sale of its 5.4% stake in PayPay Corp.
Stake Sale Details
The 5.4% stake sale in PayPay Corp. was executed through Paytm’s subsidiary, One97 Communications Singapore Pvt. The divestment, which amounted to $280 million (approximately Rs 2,364 crore), is part of Paytm’s strategy to streamline operations by selling off non-core assets and refocusing its business objectives. Earlier this year, the company also sold its entertainment and events ticketing segments to Zomato for Rs 2,048 crore as part of this broader strategy.
Current Share Price Insights
On a recent trading day, Paytm’s shares increased as much as 5.55%, reaching Rs 1,062.95 per share. While the stock later moderated its gains, it was still trading 3.08% higher at Rs 1,038, contrasting with a 1.13% decline in the NSE Nifty 50 index. Over the last year, Paytm’s shares have appreciated by 68.58%. The total trading volume for the day was approximately 2.3 times higher than the average volume over the last 30 days. The relative strength index indicated strong performance at 76.
Analyst Recommendations
According to Bloomberg data, out of 18 analysts monitoring Paytm, seven have issued ‘buy’ ratings, six recommend holding, and five advocate selling the stock. The average analyst consensus price target suggests a potential decline of 28.9% from the current levels, highlighting a cautious outlook among market experts.
