Paytm shares hit fresh 52-week high on positive outlook ahead of Q2 results; stock up 83% YTD

Paytm‘s shares continued their upward trajectory into a new session, hitting a fresh 52-week high on October 11. The surge is attributed to the optimistic outlook of brokerages on One97 Communications, which operates Paytm. Positive sentiment among investors, driven by the overall bullishness in the stock market contributed to the rising share price.

On October 11, Paytm shares closed 2.4 percent higher at Rs 972.50 on NSE.

Paytm shares have risen 83 percent so far in 2023, outperforming benchmark Nifty 50 which has risen 8 percent during this period. Analysts see a further rise in Paytm stock.

Brokerage bullish on Paytm

Domestic brokerage firms Motilal Oswal Securities and Yes Securities have raised Paytm’s target price while international brokerage Bernstein added the stock to its India portfolio on expectations of healthy September quarter earnings. Paytm is slated to announce its Q2 results on October 20.

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Motilal Oswal Financial Services expects a 36 percent year-on-year (YoY) revenue growth in the second quarter to Rs 2,600 crore and a 72 percent increase in contribution profit to Rs 14,500 crore. It expects Paytm’s gross merchandise value (GMV) to grow 46 percent YoY and the value of loans disbursed is also estimated to be 135 percent higher YoY. The brokerage has retained ‘buy’ rating on the stock with a target price of Rs 1,000.

Meanwhile, Yes Securities also has a ‘buy’ call on the digital payments company stock with a target price of 1,025. It expects Paytm to achieve robust sequential revenue growth due to consistent loan disbursements and the addition of new devices.

Paytm ‘well-positioned’ for success

According to Bernstein, in the evolving digital lending landscape, it is premature to determine outright winners, especially considering the entry of Jio Financial Services. However, Paytm seems well-positioned for success. In FY23, it acquired more lending customers than the top four private sector banks combined, showcasing strong customer acquisition capabilities, the analyst wrote. The brokerage has an ‘Overweight’ rating on the stock with a target price of Rs 1,100.

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