Paytm shares upbeat as company's Q4 loss narrows; Goldman Sachs sets 12-month target of Rs 1,150

Paytm share price: The consolidated revenue from operations of the company grew 51.5 per cent year-on-year (YoY) to Rs 2,334.5 crore in the quarter under review.

Paytm share price: Paytm shares rose after company’s net loss narrows in quarter ending March 31, Image- PTI

Paytm share price: Shares of One 97 Communications, the parent company of Paytm, rose over 3 per cent on BSE after the fintech giant's consolidated net loss narrowed sharply year-on-year (YoY) in the quarter ending March 31, 2023. The company on Friday, May 6, posted a consolidated loss of Rs 167.5 crore for the fourth quarter that ended March 31, 2023, against a loss of Rs 762.5 crore in the year-ago period. The consolidated revenue from operations of the company grew 51.5 per cent year-on-year (YoY) to Rs 2,334.5 crore in the quarter under review. For the year ended March 31, 2023, One97 Communications reported a narrowing of loss to Rs 1,776.5 crore from Rs 2,396.4 crore in the previous fiscal.

The company said that during the second half of this year, it achieved operational profitability (EBITDA before ESOP) and added, "We believe we can continue our growth momentum and improve our profitability further". "We have made significant investments towards sales manpower, improvement of technology platform, marketing spends etc., which will help us carry this momentum," the company said.

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The company said in its press release, "Our loan distribution business continued to scale, in partnership with our lending partners. In Q4 FY 2023, across our three product offerings (Paytm Postpaid, Personal Loans, and Merchant Loans), loans amounting to Rs 12,554 crore were distributed through the Paytm platform. As of March 2023, 95 lakh borrowers have taken a loan through our platform. With low penetration rates currently for each of our loan distribution products, we see a long runway for growth in this business. Device subscriptions offer an attractive cross-sell opportunity."

In reaction to the March quarter, Goldman Sachs has maintained "BUY" on the stock with a target price of Rs 1,150. The brokerage added that it expects the company to become most profitable within India's Internet coverage starting FY25E. Resolution of outstanding regulatory issues, Goldman Sachs notes, will be the next catalyst for the stock.

Other global brokerages have also given a positive view on Paytm:

Paytm
Brokerage	Rating	New Target	Old Target
CLSA	Buy	850	750
Morgan Stanley	Equalweight	695	--
JP Morgan	Overweight	950	--
Citi	Buy	1144	1103
Macquarie	Outperform	800	--
Goldman Sachs	Buy	1150	--

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