One 97 Communication, or Paytm, rose 2.84% on June 14, reaching a new 52-week high of INR 864 on the NSE. The company has returned roughly 19% in a month and 41% in a year, with a market capitalisation of INR 54,314 crore - a gain of INR 1,499 crore in a single day.
However, its share price remains substantially below its IPO price. Paytm has been under pressure since its first public offering on November 18, 2021, and it is still 56% below its listing price and 61% below its issue price of INR 2150. However, the stock has recently gained traction, fueled by better-than-expected quarterly results and good management forecasts.
Its losses fell to INR 168 crore in the March quarter, down from INR 761 crore year on year and INR 393 crore in the previous quarter. In a year, consolidated revenue from operations increased by over 52% to INR 2,335 crore. Paytm announced a solid monthly performance last week, backed by an increase in its subscription devices for payment gadgets.
Its products, such as the Soundbox and POS machines, are currently paid for by about 75 lakh retailers. The consumer base continues to expand, with 9.2 crore average monthly transacting clients for the quarter so far (average for April and May 2023), a 24% increase year on year.
Furthermore, Gross merchandise volume (GMV) for the last two months was INR 2.65 lakh crore. The company, in a stock exchange filing, said, “Our focus over the last few quarters has remained on payment volumes that generate profitability for us, either through net payments margin or direct upsell potential."
Paytm is also likely to benefit from RBI’s First Loss Default Guarantee (FLDG) framework. Under FLDG, fintechs help banks and NBFCs recoup losses that occur when customers default on payments. Paytm has seven lending partners and aims to expand three to four partners by next year.
The head of research (PCG), SMIFS, Sharad Avasthi said, “We believe that Paytm is in for some strong rating in the years to come as the company settles into existing businesses and starts delivering bottom line growth. The company may report earnings of somewhere around 17 INR in FY26."