Paytm shares resume fall after 2-day climb, stock down 9% from day's high

Shares of One 97 Communications Ltd, Paytm's parent, fell sharply from their upper circuit level in Friday's trade, halting their two-day upmove. The stock moved 5 per cent higher in early trade to hit a high of Rs 396.35. As the session progressed, it slipped 8.58 per cent from its day's high to trade at Rs 362.35.

The digital payments firm has recently issued a clarification on a news report titled, "Adani in talks with Sharma to acquire stake in Paytm." We hereby clarify that the mentioned news item is speculative and the company is not engaged in any discussions in this regard, said Sunil Kumar Bansal, Company Secretary & Compliance Officer at Paytm.

The counter has faced tremendous pressure since Reserve Bank of India (RBI) announced restrictions on Paytm Payments Bank's operations on January 31 this year amid persistent non-compliances and continued material supervisory concerns. On a year-to-date (YTD) basis, Paytm has declined over 42 per cent.

As per technical charts, support on the counter could be seen at Rs 340. And, a decisive close above Rs 386 is required for further upside.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "Immediate support lies around the Rs 340 zone, while sturdy resilience is placed around the Rs 400 range."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 340 and resistance at Rs 386. A decisive close above Rs 386 level may trigger a further upside till Rs 400. The expected trading range will be between Rs 325 and Rs 410 for a month."

The counter was trading higher than the 5-day, 10-, 20-day and 30-day simple moving averages (SMAs) but lower than the 50-day, 100-, 150-day and 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 54.49. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a negative price-to-equity (P/E) ratio of 16.09 against a price-to-book (P/B) value of 1.93. Earnings per share (EPS) stood at (-)23.24 with a return on equity of (-)11.97.