Paytm's stock has experienced significant growth over the past six months, with Emkay Global forecasting even more gains. The stock has surged by an impressive 66%, reflecting investor confidence and positive market sentiment.
With its continued focus on regulatory approvals and business expansion, Paytm’s growth outlook remains promising.
Paytm's commitment to regulatory compliance
Paytm's founder and CEO, Vijay Shekhar Sharma, has recently reiterated the company's dedication to securing a payment aggregator (PA) licence from the Reserve Bank of India (RBI). Despite facing regulatory challenges, Sharma confirmed that the company will reapply for the licence in the near future.
This commitment is crucial for Paytm’s growth strategy as regulatory compliance opens doors for broader business opportunities, potentially driving more investors to invest in stock. The company's persistent focus on aligning with RBI regulations shows its commitment to expanding and stabilising its operations.
Paytm's stock performance: A strong six months
The stock of One 97 Communications Ltd, Paytm’s parent company, has seen an impressive rise in recent months. Paytm's stock climbed by 3.31% in recent trading sessions, reaching a high of ₹673.05. As of the last update, it was trading at ₹662.85, marking a notable 66.36% increase over the last six months.
This surge has been driven by Paytm’s evolving business model and optimistic future projections, making it an attractive option for those looking to invest in stock. The stock’s upward trajectory signals confidence in Paytm’s long-term profitability and potential for continued growth.
Emkay Global's bullish outlook on Paytm
Emkay Global, a leading domestic brokerage firm, recently upgraded Paytm’s stock rating from ‘Reduce’ to ‘Add,’ indicating a positive shift in outlook. The firm raised its target price to ₹750, forecasting a 13.15% potential upside. Emkay Global's analysis suggests that easing regulatory pressures and Paytm’s robust cost-cutting measures will contribute to its accelerated path to profitability.
These developments are encouraging for anyone considering an opportunity to invest in stock. With Paytm's business turnaround already underway, particularly in its loan distribution services, Emkay expects the company to post a stronger financial performance in the near future.
Scaling of broking and insurance business
In addition to its core payments platform, Paytm has made significant strides in scaling its broking and insurance distribution business, which has already achieved profitability. Furthermore, the recent divestment of its entertainment business in the second quarter of this fiscal year is expected to strengthen its cash reserves and reduce its net losses by the end of FY25.
This strategic move aligns with Paytm's focus on optimising its resources and divesting non-core assets, making it more attractive to those seeking to invest in stock. By concentrating on its key growth areas, Paytm is positioning itself as a leaner, more focused company ready to capitalise on new opportunities.
Market valuation and future projections
At present, Paytm trades at a premium compared to global paytech competitors, such as PayPal and Paysafe, due to India’s growing digital economy and Paytm’s unique position in the loan distribution market. Although Paytm trades at a discount compared to Buy Now, Pay Later (BNPL) players like Affirm, Emkay Global believes Paytm’s further rerating depends on its ability to recover lost consumer engagement and grow its lending business.
With these factors in mind, potential investors may see this as an ideal time to invest in stock, especially as regulatory pressures ease and the company’s financial health continues to improve.
Strategic business moves and future outlook
Paytm’s recent business developments, including selling its entertainment ticketing arm to Zomato for ₹2,048 crore, show its determination to streamline operations and strengthen its core businesses. This move comes on the heels of regulatory scrutiny imposed on Paytm Payments Bank, but the company remains focused on overcoming these challenges.
With plans to reapply for crucial licences and optimise its cost structure, Paytm is well-positioned for future growth. For those looking to invest in stock, Paytm’s strategic direction, coupled with strong market performance, makes it a stock worth considering for long-term gains.
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