Paytm shares hit 52-week high as Bernstein initiates coverage; check details

Shares of Paytm (listed as One97 Communications)  hit a fresh 52 week high today after brokerage Bernstein initiated coverage on One 97 Communications Ltd (Paytm) with an 'Outperform' rating. Paytm's early signs of an edge in digital lending, achieved by leveraging its dominant digital payments platform, puts it on the right side of the disruption, Bernstein said. 

Paytm stock rose 2.80% to Rs 931 against the previous closing price of Rs 905.60 on BSE. 

Market cap of Paytm rose to Rs 57,656 crore on BSE. Total 3.38 lakh shares of the firm changed hands amounting to a turnover of Rs 30.99 crore. The stock fell to a 52-week low of Rs 439.60 on November 24, 2022. 

The stock has risen 18.19 per cent in a year and gained 71 per cent in 2023.  

In terms of technicals, the relative strength index (RSI) of Paytm stands at 64, signaling it's neither trading in the overbought nor in the oversold territory. The stock has a beta of 0.8, indicating low volatility in a year. Shares of Paytm are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.  

Bernstein has assigned a 12-month target price for Paytm at Rs 1,100. This is 8 per cent higher than the consensus estimate of Rs 1,018 and indicates 21 per cent potential upside over Wednesday's closing price of Rs 905.60.  

Bernstein said while it's too early to declare winners in the digital lending space, it finds Paytm -- a dominant digital payments platform with a promising head start in the lending business -- to be on the right side of the disruption. 

"We expect its loan disbursal volumes to grow sharply and achieve a market share of 4 per cent by FY26E (in high-yield (>13 per cent interest rate) household lending segment). And with stabilising margins in its payments segment, we expect the business to breakeven by FY25E and generate an EPS of Rs 130 by FY30E," it said. 

 

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