Paytm Share Price Drops Over 3% as Q2FY24 Results Show Net Loss

Paytm Share Price Drops Over 3% as Q2FY24 Results Show Net Loss
Paytm Share Price Drops Over 3% as Q2FY24 Results Show Net Loss
Paytm Share Price Drops Over 3% as Q2FY24 Results Show Net Loss
Paytm Share Price Drops Over 3% as Q2FY24 Results Show Net Loss

Paytm Share Price Drops Over 3% as Q2FY24 Results Show Net Loss

Paytm Share Price Drops Over 3% as Q2FY24 Results Show Net Loss

Paytm Share Price Drops Over 3% as Q2FY24 Results Show Net Loss

Paytm’s Q2FY24 Results and Analyst Predictions

Paytm shares experienced a 3.47% decline to ₹953.00 apiece on the BSE following the announcement of a consolidated net loss of ₹292 crore for the second quarter of FY24. However, One 97 Communications, Paytm’s parent company, managed to narrow down its loss by 49% compared to the previous year, reporting a loss of ₹1,914 crore in Q2FY23.

Strong Revenue Growth Amidst Losses

Paytm recorded a consolidated revenue from operations of ₹2,519 crore in the September quarter, marking a substantial 32% growth from the same period in the previous year. Despite the loss, the fintech major’s negative earnings before interest, depreciation, taxes, and amortization (EBITDA) for Q2FY24 was ₹232 crore, an improvement over the ₹538 crore EBITDA loss in the previous year.

Analyst Insights:

BoFA Securities: Paytm’s Q2 results were largely in line with revenue estimates, with improved EBITDA due to steady payments growth and credit uptake. They raised their FY24 and FY25 EPS and have a ‘Buy’ rating on Paytm, with a target price of ₹1,165 per share.

Goldman Sachs: Goldman Sachs sees continued momentum in lending and payments, with potential catalysts for Paytm including resolution of regulatory issues and involvement of a bank as a lending partner. They maintain a ‘Buy’ rating with a target price of ₹1,250 per share.

Citi: Citi views Paytm’s investments in its devices business positively, raising its Adjusted EBITDA estimates. They lowered their multiple to 48x but maintain a ‘Buy’ rating with a target price of ₹1,300 per share.

Motilal Oswal Financial Services: Paytm’s steady growth in GMV and healthy disbursements contributed to overall revenue growth, and they expect the company to achieve EBITDA breakeven by FY25. They have a ‘Buy’ rating with a target price of ₹1,160 per share.

Dolat Capital: Expecting significant revenue growth over the next decade and profitability starting from FY25E, Dolat Capital believes Paytm’s long-term potential is best evaluated through DCF valuation. They maintain a ‘Buy’ rating with a target price of ₹1,400 per share.

Market Performance and Future Prospects

Despite the recent decline, Paytm shares have rallied more than 81% year-to-date and increased by over 52% in the past year. As of 10:00 am, Paytm shares were trading 2.29% lower at ₹964.75 apiece on the BSE.

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