Paytm stock recovers 34% from 52-week low; what should investors do?

Shares of Paytm (listed as One97 Communications) have recovered 34 per cent from their 52-week low in over a month. The stock, which hit a 52-week low of Rs 511 on May 12 this year, was trading at Rs 685.50 in the afternoon session today on BSE. The stock took over 1.5 months to recover 34.14 per cent.

However, the large cap stock is still down by Rs 1,269.5 or 64.93 per cent compared to its IPO listing price of Rs 1,955 on November 18, 2021. Against the IPO issue price of Rs 2,150, the Paytm stock has lost 68.11 per cent or Rs 1,464.5 till date.

Shares of the Vijay Shekhar Sharma-led firm fell 3 per cent to Rs 684.20 today against the previous close of Rs 705.75 on BSE. They touched an intraday low of Rs 681.25, falling 3.47 per cent on BSE.

Shares of the digital payments firm are trading higher than the 5-day, 20-day, 50-day and 100-day moving averages but lower than 200-day moving averages.

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However, the stock has lost 48.79 per cent in 2022 but risen 6.25 per cent in a month. Market cap of Paytm fell to Rs 44,477 crore on BSE.

Total 1.53 lakh shares of the firm changed hands amounting to a turnover of Rs 10.70 crore. The stock hit a 52-week high of Rs 1961.05 on November 18, 2021.

Here's a look at how investors can approach the stock at the current levels.

Manoj Dalmia, founder and director, Proficient Equities

"Paytm is seeing some recovery and has almost completed base formation. If the current level of Rs 737 is crossed, then it might reach Rs 832 levels in the near term or else it might just retrace to Rs 665 levels and then continue. Investors can buy in small quantities with small stop losses. Those who are holding the stock can wait for some moves on the upside."

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Ravi Singh, vice President and head of Research, Share India

"Paytm stock is witnessing a massive rally supported with huge volumes, taking cues from the high demand in the tech stocks globally. The stock may touch the levels of Rs 750 - Rs 780 in this momentum. However, the outlook is still gloomy on back of EBITDA losses and poor profit margins, which may take longer time to reach break-even. Investors may take this opportunity to exit their holdings."

The firm reported a loss of Rs 763 crore for the quarter 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.

One97 Communications Limited is a mobile Internet company. The company runs Paytm, which is a digital goods and mobile commerce platform. The company delivers mobile content and commerce services to various mobile consumers through telecommunication applications cloud platform. Its business offerings include mobile payments and mobile marketing. The company's segments include payment, commerce, cloud and others.