Shares of Paytm jumped 5.5% on the BSE to INR 814.8 on Friday, a day after BofA Securities upgraded its rating on the stock to ‘buy’ from ‘neutral’
Analysts expect Paytm to reach INR 900 level in the coming weeks, helped by positive investor sentiment on new-age tech stocks and its improved financial performance
Like Paytm, shares of Zomato have also soared over the last few sessions. The stock ended 2.3% higher at INR 77.57 today
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Shares of fintech giant Paytm continued its rally for the third straight session on Friday (June 9), jumping 5.5% on the BSE to end the day at INR 814.8 on positive investor sentiment.
The stock closed the day at a level last seen in August 2022.
Shares of Paytm surged 6.2% on the BSE yesterday after BofA Securities upgraded its rating on the stock to ‘buy’ from ‘neutral’.
The brokerage noted that the risk-reward ratio on the stock is turning more positive. It also sees Paytm’s margins improving on shift in revenue mix towards high-margin Soundbox and lending businesses.
Meanwhile, brokerage CLSA maintained its ‘buy’ rating on the stock, with a target price of INR 850.
Pravesh Gour, senior technical analyst at Swastika Investmart, said that Paytm looks well placed on the technical charts, making it attractive for long-term investors.
“It has formed an ascending triangle pattern, which typically suggests a continuation of the uptrend. The breakout from this pattern is accompanied by strong volume, indicating significant buying interest. Furthermore, the counter has formed a series of higher highs and higher lows, which is characteristic of an uptrend. This pattern indicates that buyers are willing to pay higher prices for the counter over time,” Gour said.
On the upside, INR 840 is an immediate hurdle for the stock. However, it can even surge to INR 900 if it crosses this level, Gour added. On the downside, a cluster of moving averages at around INR 730 is a strong demand zone in case of any correction, he said.
Meanwhile, Paytm has also shown improvement in its financial performance. After achieving adjusted EBITDA profitability in Q3 FY23, it reported a 78% narrowed loss of INR 167.5 Cr in Q4. Its operating revenue also surged 51% year-on-year (YoY) to INR 2,334.5 Cr in the March quarter.
With its lending business growing, Paytm disbursed 85 Lakh loans worth INR 9,618 Cr ($1.2 Bn) in the first two months of the June quarter of FY24, up 54% and 169% YoY, respectively.
Manish Shah, an independent analyst, also told Inc42 on Thursday that Paytm is likely to touch INR 900-INR 910 levels over the next few weeks.
The rally in Paytm shares comes at a time when the overall investor sentiment has turned positive on new-age tech stocks. Besides Paytm, the likes of Zomato and PB Fintech taking strides towards achieving profitability has boosted the confidence of investors.
Like Paytm, shares of Zomato have also soared over the last few sessions. The stock ended 2.3% higher at INR 77.57 on the BSE today, crossing its IPO price band of INR 72-INR 76 for the first time in over a year.
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