PaytmShares Surge 19% in Just One Month - Expert Analysis Inside!

The Paytm share price has surged by over 19% in the past month, thanks to a variety of factors such as a share buyback, attractive valuations, strong results, and the possibility of a stake buy by Sunil Bharti Mittal. Analysts seem to be bullish on the stock, with most recommending a buy or strong buy rating.

Share Price Surges

Paytm share price: 19% rally in last 1 month, check what analysts are saying!

Paytm's share price has witnessed a tremendous surge of over 19% in the past month. After a bumpy ride since its listing on the stock market in November 2021, the Paytm share price has regained its mojo and has been on a positive upward trend.

In this blog, we try to understand the reasons behind this significant appreciation in the share price and evaluate whether this upward trend will continue or not.

Reasons for the Rise

Sunil Mittal Considering Acquisition of Stake

One of the direct reasons behind the recent rally of the Paytm share price is the news that the Airtel Chairman, Sunil Bharti Mittal, is looking to buy a stake in the fintech major.

According to media reports, Mittal is contemplating buying a stake in Paytm and merging its financial services unit into the Paytm Payments Bank. However, Mittal has recently denied any such plans.

Firm to Buyback Shares  

The company recently completed a share buyback worth Rs 850 crore at an average price of Rs 545.9 per share. Since the announcement of the buyback on December 13, 2022, the Paytm share price has surged by more than 18%. The share buyback has significantly aided the growth of Paytm's share price.

Appealing Valuations

Following a significant fall from its IPO price levels, experts believe that the Paytm share price is now attractively valued. Furthermore, Paytm's unique capabilities and loan disbursement abilities provide its share price with significant headroom for growth.  

Read: Markets Rally on Inflation Data

Positive Financial Performance  

Paytm surprised analysts and investors alike with its October-December 2022 quarter results. The company achieved operational profitability almost three quarters ahead of its guidance, reporting an operating profit before ESOP costs of Rs 31 crores.

Additionally, the company's net loss narrowed to Rs 392 crores for the same period compared to Rs 779 crores a year earlier. These strong results have boosted investor sentiment and contributed to the rise in the Paytm share price.

Analysts View

Macquarie

The global brokerage recently double-upgraded the Paytm stock to Outperform from Underperform with a price target of Rs 800. Citing the sustained narrowing of losses for the company as a positive, the firm believes that the change in the management's approach can drive the Paytm share price higher in the near future.

Goldman Sachs

The renowned brokerage has a Buy rating on the stock with a price target of Rs 1,150. The firm is optimistic about the company's prospects due to its recent operating profitability.

Read: 8 Ways to Help You Pursue Your Financial Goals

Yes Securities

The domestic brokerage has a Neutral rating on the stock with a price target of Rs 600. The firm has cited the strong loan disbursal growth as a positive for the fintech major. However, the consistent reporting of losses, even though narrowing, remains a concern for the firm.

The Bottom Line

Paytm's share price has seen a remarkable rise of over 19% in the past month, driven by various positive factors such as solid results, share buyback, attractive valuations, and a potential stake buy by Sunil Bharti Mittal.

Moreover, the analyst community appears to be bullish on the stock, with 5 out of 11 analysts giving it a strong buy rating and 4 analysts recommending a buy. While 2 analysts have a hold rating, the overall sentiment seems to be positive towards the company.

With its unique capabilities and growth potential, Paytm's upward trajectory may continue in the future, making it an exciting stock to watch in the coming months.

PayTM share jumps

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.

References:

https://www.indmoney.com/articles/stocks/paytm-share-price-why-is-it-on-a-winning-spree-recently-check-what-analysts-are-saying

https://economictimes.indiatimes.com/one97-communications-ltd/stocks/companyid-2017785.cms

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