Paytm stock zooms 14% from day's low post Q4 earnings, what should investors do?

Shares of Paytm (listed as One97 Communications) zoomed 14 per cent from the day's low today after the fintech major's parent One 97 Communications reported a widening of consolidated net loss for the quarter ended March 31, 2022.

The large cap stock gained 9.49 percent to Rs 629.95 in afternoon session on BSE. Earlier, the stock opened with a loss of 3.99 per cent at Rs 552.4 against the previous close of Rs 575.35 on BSE. The stock recovered 14.02 percent from the day's low today.

Paytm stock is trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

The share has lost 57.25 per cent in 2022 and fallen 8.84 per cent in a month. Market cap of Paytm stood at Rs 36,913 crore on BSE.

Total 0.53 lakh shares of the firm changed hands amounting to a turnover of Rs 3 crore.

The stock hit a 52-week high of Rs 1961.05 on November 18, 2021 and a 52-week low of Rs 511 on May 12, 2022.

ALSO READ: Paytm re-appoints Vijay Shekhar Sharma as MD & CEO

The Vijay Shekhar Sharma-led firm reported a loss of Rs 763 crore for the MDR-bearing quarterOfficer ended March 31, 2022 against a loss of Rs 778.5 crore in the December quarter and Rs 444 crore in the year-ago period.

However, revenue from operations zoomed 89 per cent year-on-year (YoY) to Rs 1,540.9 crore in Q4 as compared with Rs 815.3 crore in the corresponding quarter last year.

Main drivers increased in merchant payments processed through MDR bearing instruments (Paytm Wallet, Paytm bank account, cards, and others) and disbursements of loans through our partners on Paytm platform, the company said in a regulatory filing.

YES Securities has maintained a reduced call on the stock. "We maintain 'Reduce' on PAYTM with a revised price target of Rs 580: We value PAYTM at 5.5 times FY23 P/S, factoring in customer addition embargo and increased regulatory risk."

ICICI Securities has maintained its buy stance on the stock.

 "Management is confident of achieving operating profitability (positive EBITDA before ESOP cost) by Q2FY24 on the back of improving contribution margins and decreasing indirect expenses as a percentage of operating revenues. We remain conservative and expect the company to be EBITDA-positive by FY25E. Maintain BUY with an unchanged target price of Rs 1,285 based on customer lifetime value methodology."

Meanwhile, One 97 Communications has reappointed its founder Vijay Shekhar Sharma as managing director (MD) and chief executive officer (CEO) till December 18, 2027.

"We wish to inform you that based on the recommendations of the Nomination and Remuneration Committee and subject to the approval of shareholders, the Board of Directors of the Company ('Board'), at their meeting held on May 20, 2022, have considered and approved re-appointment of Vijay Shekhar Sharma as 'Managing Director & Chief Executive Officer' of the Company for a tenure of 5 years effective from December 19, 2022, to December 18, 2027," One 97 Communications said in a regulatory filing to the stock exchanges.