Dolat Capital kept bullish calls and increased the target price by 46% on Paytm as it sees the company stabilising from the regulatory clampdown against it.

What The Brokerage Said: Dolat Capital gave the stock a "buy" call with a target price of ₹920, which reflects a 37% upside from current levels. The brokerage noted several developments within Paytm that have reduced pain points and brought several business segments back to normal for the company.

The brokerage's user feedback checks in the quarter that ended in September show that the company managed to migrate users from the Paytm payments bank handle to Axis, State Bank of India, HDFC and Yes Bank. 

In the quarter Paytm also cleared regulatory overhang by getting foreign direct investment approval in the Paytm Payments Service subsidiary, allowing the company to apply for a payment aggregator license, the research firm added.

See Also: NTPC Increases Total Capacity With New Solar Projects In Rajasthan, Madhya Pradesh

The data from National Payments Corporation of India in the June to August period suggests that the UPI consumer base has remained stable for the company, the brokerage said.

Dolat Capital also pointed out that an expansion in its financial distribution business’ partner network also augurs well for Paytm as the company seems to be on the path to achieving adjusted EBITDA break even by Q4FY25, which will provide positive cash flow for the company. 

The brokerage also said the sale of its ticketing business to Zomato would help shore up Paytm’s financials in FY25.

RBI had barred Paytm Payments Bank from taking fresh deposits in January.

Price Action: Shares of Paytm rose 5.12% to ₹723.55 on Tuesday. Paytm’s shares fell 58% from there to its 52-week low in May. Since then, the stock clawed back most of the losses and surged 128% since May 8.

Read Next: Top 10 Defence Companies Ranked By Order Book Value