Paytm shares decline after strong Q2 results; is it the right time to add Paytm stock in your portfolio?

Paytm share price target: CLSA has maintained a 'buy' on Paytm and has raised the target price to Rs 1,200 from Rs 1,050, translating to an upside of over 20 per cent from Friday's close.

Paytm share price NSE: Shares of One97 Communications, the parent company of digital payments firm Paytm, slipped as much as over 3 per cent on Monday, October 23. Image: Reuters

Paytm share price NSE: Shares of One97 Communications, the parent company of digital payments firm Paytm, slipped as much as over 3 per cent on Monday, October 23, despite Paytm announcing strong June quarter earnings on Friday after market hours driven by an increase in merchants' subscription revenues, merchant payment volumes, and loan disbursals. Paytm shares declined as much as over 3 per cent to touch the day's low of Rs 953 each on NSE.

The payments and financial services company and pioneer of QR, Soundbox, and mobile payments revenue surged by 32 per cent YoY to Rs 2,519 crore, and its EBITDA before ESOP cost has improved to Rs 153 crore as compared to Rs 84 crore in Q1FY24 (excluding UPI incentives) in Q2FY24.

The company's payments revenue increased by 28 per cent YoY to Rs 1,524 crore, while its payments profitability improved, with the net payment margin expanding by 60 per cent YoY to Rs 707 crore.

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Paytm's financial services revenue surged 64 per cent Year-on-Year (YoY) to Rs 571 crore in Q2FY24, while the number of loans distributed through the platform was 1.32 crore, an increase of 44 per cent YoY. The value of loans distributed grew to Rs 16,211 crore, or 122 per cent YoY, across its product offerings - Paytm Postpaid, Personal Loans, and Merchant Loans. Read more

Paytm share price target: Should you buy, sell, or hold? Here's what brokerages suggest:

CLSA has maintained a 'buy' on Paytm and has raised the target price to Rs 1,200 from Rs 1,050, translating to an upside of over 20 per cent from Friday's close. In addition, Citi and Jefferies have maintained a 'buy' call each on the stock. Citi has raised the target to Rs 1,300 from Rs 1,160, whereas Jefferies has placed the target at Rs 1,300. Moreover, Morgan Stanley has maintained an equal-weight rating on the counter with a target price of Rs 830.

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