One97 Communications, which manages Paytm, reported a net loss of Rs 761.4 crore for the March quarter compared to Rs 441.8 crore in the same quarter last year. The loss for the December quarter was slightly less than Rs 778 crore.
Revenue from the operation was Rs 1,540.9 crore, up 88.99 per cent from Rs 815.3 crore in the same quarter a year ago.
Paytm’s revenue growth of 89 percent was 4 percent ahead of Goldman Sachs’ estimates, while the payout rate (non-UPI) continued to rise over the past two quarters, contrary to previous expectations of steady decline.
“Paytm’s 4QFY22 results show another quarter of vertically strong and improved monetization of payments, while the growth momentum for financial services and cloud business is strong. , Which we see as a key catalyst for the stock, “said Goldman Sachs, which has set a target price of Rs 1,070 on the stock.
Macquarie has kept its 50 450 target intact, as it believes profitability is still a tough battle and it may take 12 quarters to break the Ebitda loss amount.
Macquarie’s coverage has been closely followed by investors since the release of its initial report on the stock’s listing day on November 18, 2021. With an issue price of Rs 2,150 to Rs 1,200 from the initial target of Rs 900 in January, Rs 700 in February and Rs 450 in March, the foreign brokerage has made several revisions to its price target in the last few months.
Analysts say this stock is vastly different.
ICICI Securities said the March quarter was characterized by improved penetration for lending products and growth in the lending business led by the company’s ‘Buy Now’ (BNPL) products.
It said Paytm saw increased margin / adjusted-Ebitda (before ESOP) margins due to net payment rates, increasing financial services revenue contributions and marketing spending, adding that monthly transaction user (MTU) growth was also sustainable and offline d. Placement.
Where Paytm lagged behind and failed to encourage was the ‘payment service for merchants’ and moderate gradual revenue growth due to lower trade revenue and a 4 percent lower QoQ growth in gross merchandise value (GMV) than previously thought.
Management is confident of achieving operating profit within Q2FY24 on improving contribution margins as a percentage of operating revenue and reducing indirect costs.
“We are conservative and expect the company to be Ebitda-positive by FY25,” ICICI Securities suggested an unchanged target price of Rs 1,285.
Goldman Sachs says Paytm’s lending business is growing well while maintaining a good credit metric, which it believes should help reduce investors’ concerns further.
“Overall, we have raised our topline estimates by 3-4 percent and are expected to maintain growth momentum; we forecast 90 percent YoY revenue growth for Paytm on 1QFY23, with 38 percent FY22-25E revenue CAGR,” Goldman Sachs said.
(Disclaimer: The recommendations, suggestions, opinions and opinions offered by the experts are their own. These do not represent the views of the Economic Times)