North India Statesman
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Paytm share price: The stocks of One 97 Communications saw a major decline on 20 March. Shortly after the market opened, the stock declined by 6 percent. However, there was some improvement later. It was trading at Rs 726.95 at Rs 726.95 at 01:07 pm. The company provides financial services under the name Paytm. The reason for the decline in the company’s shares is a report by brokerage firms. Some brokerage firms have rated Paytm shares ‘Neutral’ and ‘Hold’.
Conditions are difficult for financial distribution business.
Brokerage firms believe that conditions for financial distribution businesses in short term look difficult. This may affect the performance of Paytm. Foreign brokerage firm Jefferies has given a ‘hold’ rating on Paytm’s stock. He has given a target price of Rs 850 for its shares. This means that this stock can grow up to 11 percent from the concluding price of March 19. The brokerage firm said in its report that the government has given an incentive of Rs 1,500 crore for low -price UPI P2M transactions, which is half of last year’s amount.
Ebitda may be less than forecast
Jefferies estimates that the incentive on low -price UPI P2M transactions will be reduced from 20 basis points to 6 basis points. If the incentives of Paytm are reduced by this ratio, its adjusted EbitDA for FY 2025 may be 50 percent less than the forecast. In FY 26-27, Ebitda may be reduced by 20-30 percent. In FY 2025, the tax-benefit profit (PBT) may fall by 15 percent.
Focusing on financial services business will benefit
Brokerage firm Motilal Oswal Financial Services (MOFSL) has given Paytm ‘neutral’ rating. A target of Rs 870 has been given for its shares. The company is focusing on financial services business. It also emphasizes the reduction in cost. This can increase his profits. Financial services in the company’s revenue are expected to increase by FY 28 to 27 percent. The brokerage firm has expected an increase in the number of new customers. MTU Aadhaar is also expected to increase. This will give the company an opportunity to cross-sell.
Big loss to investors investing in IPO
The company’s stock is still 64 percent below its IPO price. The company’s IPO came in November 2021. The company offered investors in IPOs at a price of Rs 2,150 per share. People investing in this IPO have suffered heavy losses. The company’s shares were listed at a much lower price than the IPO price. Since then it could never reach the listed price. However, in the last one year the stock has risen around 74 per cent.
