One 97 Communications, the parent company of Paytm rebounded on Tuesday reversing its course after the company ended in the red for three consecutive sessions.

What Happened: Shares of the Indian fintech giant soared by over 10% after ending 6% and 4% lower in the previous two sessions. The reason for its rally is not clear but the stock is likely gaining ground after a period of profit booking. In the past week alone, the stock has gained 4.30%.

In the past year, the company’s shares have gone down by over 20% amid regulatory headwinds at the beginning of the year. In January, the Reserve Bank of India (RBI) imposed restrictions on Paytm Payments Bank Ltd (PPBL), including a prohibition on accepting new deposits and conducting credit transactions.

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But ever since then, the company has made a decent turnaround. In the past month, the company has yielded returns of more than 14%. The stock has also significantly recovered since hitting its 52-week low in May this year. In the past six months, Paytm soared by over 74%.

Earlier this month, 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. The brokerage highlighted various developments within Paytm that have alleviated challenges and returned several business segments to normal operations for the company.

Separately, Emkay Global‘s analysis in September suggested that the company’s shares could see a surge ahead. Emkay Global upgraded its rating for the payments giant to "add" from "reduce" increasing the target price to ₹750 from ₹375.

Price Action: Paytm soared by 10.16% to trade at 718.10 on Tuesday afternoon.

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