One97 Communications, the firm behind Paytm, has seen its shares surge by approximately 79% this year, with analysts predicting further growth. On Wednesday, they forecasted up to a 16% increase in the company's stock value due to anticipated sequential Q2 revenue growth. This aligns with InvestingPro's recent data, which shows a market cap of $75.27 million and an adjusted P/E ratio of 8.14 for Paytm.
Paytm's shares had already climbed 5% to INR 954.6 on Tuesday, driven by the debut of an industry-first alternate ID-based guest checkout solution and positive Q2 FY24 growth expectations for firms like Paytm. The shares ended the trading session at INR 949.5. InvestingPro data reveals that the company has been trading near its 52-week high and has seen a significant return over the last week.
Several brokerages have set optimistic target prices for Paytm. YES Securities has set a target price of INR 1,025 for Paytm, projecting a PPC proportion of 54.5%, which would lead to a 14% QoQ revenue growth from operations and a total expenses rise of 7%. It also anticipates an EBITDA margin improvement of 591 basis points QoQ. This is in line with the InvestingPro Tips that highlight the company's strong return over the last three months and prominent status in the Financial Services industry.
Motilal Oswal Financial Services Ltd (MOFSL) maintains a 'buy' rating with a PT of INR 1,000. They predict a 46% YoY GMV jump to INR 4.7 lakh crore and a loan disbursement increase of 135% YoY and 16% QoQ to INR 17,200 crore. The brokerage also forecasts Q2 FY24 operating revenue and EBITDA before ESOP costs at INR 2,600 crore and INR 175 crore respectively. It expects strong Q2 subscriptions for Paytm's payment devices and improvements in operating profitability due to increased contribution margin and operating leverage.
Bernstein has also added Paytm to its India portfolio with a PT of INR 1,100. They foresee the firm becoming profitable by FY25 through increased payments volume and expect an EBITDA margin improvement. They also anticipate robust growth in Paytm's lending business and profitability by FY25 with an EPS of INR 130 by FY30. However, InvestingPro Tips suggest that analysts do not anticipate the company will be profitable this year and that it was not profitable over the last twelve months.
Paytm's Q2 results will be announced on October 20, 2023, which will shed more light on whether these forecasts hold true. The company's net loss has decreased while it has seen revenue growth from operations. The InvestingPro data shows a revenue growth of 1.59% for the company, indicating a slow growth rate. For further insights and tips, you can explore the InvestingPro product which offers additional tips and real-time metrics about companies like Paytm.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.