Paytm shares surge after Q3 loss nearly halves — here's what else is keeping Street excited

The Paytm stock jumped by as much as Rs 41.1 or 7.8 per cent to Rs 566 apiece on BSE.

Paytm shares debuted in the secondary market in November 2021 at Rs 1,950 apiece, a 9.3 per cent discount from its issue price - Image Source: Reuters

Paytm owner One97 Communications' shares surged on Monday after the company reported a quarterly net loss that was nearly half compared with the corresponding period a year ago. The Paytm stock jumped by as much as Rs 41.1 or 7.8 per cent to Rs 566 apiece on BSE.

However, Paytm shares have a long way to cover to reach its IPO price range. At the strongest level of the day, the One97 stock changed hands at a discount of 73.7 per cent to its issue price, and a 42.5 per cent discount to its 52-week high (December 2022).

Paytm Q3 results

Post-market hours on Friday, the digital payments company reported a net loss of Rs 392 crore for the third quarter of the current financial year, as against a net loss loss of Rs 778.4 crore for the corresponding period a year ago.

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Its revenue from operations grew about 42 per cent to Rs 2,062.2 crore for the three-month period on a year-on-year basis, according to a regulatory filing.

Paytm's operational profitability target

Paytm Founder and CEO Vijay Shekhar Sharma said the company achieved its target for operational profit excluding ESOP cost. “I wrote to you on April 6, 2022, and set a target for EBITDA before ESOP cost breakeven by the September 2023 quarter,” he said.

“I am very happy to share that our company has achieved this milestone of EBITDA before ESOP cost profitability in the December 2022 quarter itself. This is three quarters ahead of our guidance,” Sharma added.

What brokerages recommend on Paytm shares

Brokerage	Rating	Target price
CLSA	Buy	Rs 750
Morgan Stanley	Equalweight	Rs 695
Goldman Sachs	Buy	Rs 1,150
Citi	Sell	Rs 1,061

CLSA, Morgan Stanley, Goldman Sachs and Citi are positive on the stock with targets implying upside potential to the tune of 28-111 per cent from its closing price on Friday.

According to Goldman Sachs, the company's operational profitability in Q3 was ahead of guidance on continued strong traction in disbursals, operating leverage and UPI reimbursement.

Paytm shares debuted in the secondary market in November 2021 at Rs 1,950 apiece, a 9.3 per cent discount from its issue price.

The stock has declined more than 41 per cent in the last one year, in which the Nifty50 has risen 2.9 per cent.

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