Paytm shares scale three-month peak; here's what Anil Singhvi recommends

Zee Business Managing Editor Anil Singhvi reiterated his view that existing shareholders of Paytm may continue to hold the stock.

Paytm shares continued to rise for a second straight session on Tuesday, taking their cumulative gain to nearly 28 per cent. On BSE, the stock of Paytm owner One97 Communications surged as much as 20 per cent to touch Rs 669.6 apiece — a level last seen on October 18, 2022.

Anil Singhvi's take on Paytm shares

Zee Business Managing Editor Anil Singhvi reiterated his view that existing shareholders of Paytm may continue to hold the stock.

Paytm has made a bottom at Rs 440-450 levels, Singhvi said, adding that the stock has more steam to surge. According to him, the investors entering the stock now are coming at the right valuation.

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Tuesday's spike cements the November 2022 low as the bottom, he said.

Earlier, he had said that those owning stocks of new-age companies like Paytm should avoid selling their holdings at "just about any price".

Paytm shares hit an all-time low of Rs 439.6 apiece on November 24, 2022.

Last week, One97 reported a quarterly net loss that was nearly half compared with the corresponding period a year ago, sending the stock soaring the next Monday as investors returned to trade. Its net loss came in at Rs 392 crore for the third quarter of the current financial year, as against a net loss of Rs 778.4 crore for the corresponding period a year ago, according to a regulatory filing.

Paytm management commentary

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... 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... three quarters ahead of our guidance,” he said.

What brokerages recommend on Paytm shares

Goldman Sachs sees the stock more than doubling. The brokerage has a 'buy' call on Paytm with a target of Rs 1,150 apiece.

Dolat Capital believes stock may touch Rs 1,250 per share levels, translating to upside of 138 per cent from Friday’s closing price of Rs 525 apiece, citing the company's improving profitability well ahead of its guided timeline.

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

The company is benefiting significantly from platform-led operating leverage and has a strong case for a major re-rating with the next focus on turning free cash flow positive, according to the brokerage.

Paytm share price history

The Paytm stock has lost more than 36 per cent of its value in the past one year, a period in which the Sensex benchmark index has risen almost five per cent.

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