The share of Paytm has weakened by 71 percent from its issue price. Analysts of brokerage house Macquarie have made a big cut in the target price for the stock.
Paytm Stock: One 97 Communications Ltd (Paytm) shares are under pressure even today. Today the company’s stock has come down to Rs 619 with a weakness of more than 2 percent. Well this fall is not a thing. Ever since the company’s stock has been listed in the market, since then there has been a constant weakness in it. The stock has lost 71 per cent from its issue price. There were already concerns about valuation and profits, recently the RBI has banned the addition of new customers, taking action on Paytm Payments Bank. According to Bloomberg, due to negative sentiment in the stock, analysts of brokerage house Macquarie have made a big cut in the target price for the stock.
How weak can the stock be?
Macquarie analyst Suresh Ganapathy has cut the target price on the stock of Paytm to Rs 450. Earlier, Macquarie had reduced the target for the stock from Rs 900 to Rs 700. Whereas even before that the brokerage had given a target of Rs 1200 for the stock. The brokerage has maintained an underperform rating for the stock. And there has been no change in the estimate of revenue.
The issue price may weaken by 80%
Macquarie has given a target of Rs 450 for the stock. Whereas the upper price band in Paytm’s IPO was Rs 2150. In this sense, this stock may weaken by more than 80 percent or more than a quarter of the IPO price in the coming days. The company’s stock was listed in the market on 18 November 2021. It was listed at Rs 1955 as against the issue price of Rs 2150, which is a record high. On the listing day, it fell 27 percent and closed at Rs 1564. The stock is currently at Rs 620.
Concerns about profits
Payment company Paytm has not come into profit yet. At the same time, the deficit has increased in the December quarter of FY 2022. The company has incurred a loss of Rs 778 crore in the December quarter. Whereas in the quarter of FY 2021, the company’s loss was Rs 532 crore. However, Paytm got a good increase in income from work. The company’s revenue increased by 89 percent to Rs 1456 crore. In the same quarter last year, the revenue of Paytm was Rs 772 crore.
(Disclaimer: The stock here has a target cut by the brokerage house. These are not the personal views of digitnews. Markets are risky, so take expert opinion before investing.)