Shares of One97 Communications Ltd, the parent company of Paytm, experienced a notable surge on Wednesday, climbing as much as 6% and surpassing the Rs 700 mark for the first time in seven months. The stock hit a high of Rs 703.35 during the trading session, which signifies a remarkable recovery of 126% from its 52-week low of Rs 310, recorded on May 9. This recent rise contrasts sharply with the stock’s performance earlier this year and marks a significant rebound from its last trading above Rs 700, which occurred in late January when it closed at Rs 761.
Throughout the early part of the year, Paytm's stock faced considerable pressure largely due to regulatory challenges imposed by the Reserve Bank of India (RBI) on Paytm Payments Bank. These restrictions had dampened investor sentiment and weighed heavily on the stock’s performance. However, recent developments have shifted the narrative positively. At the company's recent Annual General Meeting (AGM), founder Vijay Shekhar Sharma announced plans to reapply for the Payment Aggregator (PA) license, a move seen as a key step in addressing regulatory concerns.
Moreover, the stock’s upward trajectory was further supported by news from August indicating that Paytm Payments Services Limited (PPSL), a subsidiary of One97 Communications, had received crucial government approval for downstream investment from Paytm into PPSL. This development was significant as it alleviated some of the regulatory issues faced by Paytm Payments Bank, thereby boosting investor confidence.
Analysts are optimistic about Paytm's future performance. Ventura Securities has projected a bullish outlook for the stock, predicting that it could more than double to Rs 1,170 within the next two years. In a more optimistic scenario, the brokerage sets a target price of Rs 1,444, while in a bearish scenario, the stock is estimated to reach Rs 870. This positive outlook is underpinned by Paytm's strong foothold in the digital payments and financial services sector, positioning it well to benefit from the continued expansion of India’s digital economy.
Despite ongoing regulatory issues surrounding Paytm Payments Bank, Ventura Securities commended Paytm for its cutting-edge technology and robust business model. The company’s vast network of 40.7 million merchants and 78 million monthly transacting users provides a solid foundation for recurring revenue streams. Additionally, with Unified Payments Interface (UPI) emerging as the preferred digital payment method and Paytm’s Soundbox and Point of Sale (POS) systems gaining traction, Paytm is well-positioned to capitalize on the growing trend of digital transactions.
As of around 3:20 pm, Paytm’s shares were trading at Rs 672.45 on the Bombay Stock Exchange, reflecting a 1.21% increase from the previous session. This positive movement suggests continued investor confidence and an optimistic outlook for the company's future performance. The sustained upward trend in the stock price indicates a strong recovery and growing investor optimism about Paytm's potential for future growth and profitability.
Â
