Paytm's Golden Run Continues As Analyst Upgrade Supercharges Fintech Stock

One97 Communications aka Paytm shares received a renewed push to begin Thursday’s market hours on a high after major global brokerage Macquarie Capital Securities joined other investment advisors/brokerages to upgrade the stock price post its Q3 print.

What Happened? Global financial services group, Macquarie Capital Securities, which had kept an underperform call on Paytm stock since its listing, on Wednesday gave the fintech giant a double upgrade from ‘Underweight’ to ‘Overweight’, setting a target price of ₹800.

"We were earlier expecting losses to continue but at current rate of revenues and operating leverage kicking in, we expect accounting profits to be delivered by full-year 2026,” said analyst and Associate Director at Macquarie Capital Securities, Suresh Ganapathy in a note.

Macquarie joins a host of other brokerages with the move that has a ‘buy’ or ‘overweight’ recommendation on One97 Communications Ltd, the parent company of the fintech firm.

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Shares are currently up more than 40% since a record low in November, with gains greatly accelerating this week after Paytm filed its monthly operating metric update on Wednesday managing 89 million average monthly transacting users (MTU) in the month of January 2023, marking a 29% rise from January last year.

The company saw consistent growth in its loan distribution business in January with disbursements through the platform shooting up 327% year-over-year ₹3,928 crore. Offline payments saw growth too with 6.1 million merchants now subscribed for payment devices – an increase of 3 lakh subscribers in the month of January 2023.

News of the company's strong January figures come right after its Q3 FY23 numbers with Paytm marking its first-ever quarterly operating profit since listing on the stock market – with a 42% increase in revenue from operations. The firm cut down its consolidated net loss to ₹392 crore from a figure of ₹778.4 crore in the same period a year ago.

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Price Action: Paytm on Thursday traded at ₹686.35 marking a 1.55% gain from Wednesday’s figures.

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Posted In: Macquarie Capital SecuritiesOne97 CommunicationsPaytmSuresh Ganapathy