Shares of One97 Communications (Paytm) surged more than 8 per cent on Thursday to Rs 785.50, before giving up their gains partially. Shares of One97 Communications, the parent company of financial services platform Paytm, and PB Fintech, the parent company of PolicyBazaar and PaisaBazaar, were on the radar of the traders as the BofA Securities revised the ratings and target prices for the given new age companies. The global brokerage firm has upgraded Paytm to 'buy' with a higher target price, while it has downgraded PB Fintech to 'underperform' with a lower target price. The stock reacted to the news in a similar fashion. Presently, PB Fintech is trading at a price-to-sales ratio of 6 times for the FY25E, while Paytm at 3 times. Shares of One97 Communications surged more than 8 per cent on Thursday to Rs 785.50, before giving up their gains partially. The company topped Rs 50,000 crore in market capitalisation during the session. The stock settled at Rs 727 on Wednesday. Shares of Paytm have gained more than 50 per cent return in the year 2023 so far, while the stock is up about 12 per cent in the last one month. However, it is still more than 60 per cent down from its issue price of Rs 2,150. BofA Securities upgraded Paytm to 'buy' and raised its price target on the stock to Rs 855 from Rs 780 earlier. BofA said that Paytm possesses potential for positive operational leverage and sits in a 'sweet spot' due to limited competition. It also highlighted other positive factors such as the growth of digitalization driving payments and the company's robust cash balance. Paytm's loan disbursals rose by more than 50 per cent in May compared to the same period last year. Paytm also highlighted its success in offline payments, with 75 lakh merchants now subscribing to payment devices, representing a growth of 4 lakh merchants in May 2023. On the other hand, It downgraded PB Fintech to underperform with a target price of Rs 600 apiece. BofA said that the path to the company achieving Rs 1,000 crore in profits is well-flagged, but it is currently witnessing slowing growth on a high base. The brokerage called PB Fintech a good company but added that the improved profitability metrics are more or less priced in. Following the downgrade, Shares of PB Fintech dropped more than 3 per cent to Rs 623.20 on Thursday and the company's market capitalization slipped below Rs 28,000 crore mark. Shares of PB Fintech had hit their 52-week high at Rs 665.40 on Wednesday as the stock has risen about 45 per cent in the year 2023 so far.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today.)
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