Shares of One 97 Communications Ltd (Paytm's parent) fell sharply in Monday's trade, pausing their two-day sharp rebound. The stock plunged 5.57 per cent to hit a day low of Rs 587.15. It was last seen trading 5.10 per cent lower at Rs 590.20. At this price, the scrip has slipped 8.66 per cent on a year-to-date (YTD) basis and 31.11 per cent in a year.
Despite the mentioned fall, the counter has ascended by 90.39 per cent from its one-year low value of Rs 310, a level seen on May 9, 2024.
The digital payments firm recently sold its entertainment ticketing business to online food aggregator Zomato for Rs 2,048 crore. Paytm has been under tremendous pressure since Reserve Bank of India (RBI) announced restrictions on its Payments Bank's operations last year amid persistent non-compliance and continued material supervisory concerns.
A few analysts largely remained 'cautious' on the counter. Investors with a high-risk appetite should only considering taking a position, one of them said.
"The company's business margins are very thin. One should exit the stock. It would rather be on the sidelines than buy Paytm's stock," market expert Kush Ghodasara told Business Today TV.
"Regulatory concerns and risks will remain the same. Only risky investors can bet right now with a medium- to long-term," said Prashanth Tapse, Senior VP (Research) at Mehta Equities.
We may see some volatility because of the RBI intervention and scrutiny of the IPO money, Tapse added.
Technically, support on the counter could be seen at Rs 550 level. And, a decisive close above Rs 600 is required for further upside.
"The counter faced resistance at the Rs 650 zone. One can only consider buying around Rs 560 level for a potential upside target of Rs 600 in the near term. A decisive close above Rs 600 can only trigger the next round of upward run. Keep a stop loss at Rs 550 for this trade," said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking.
The scrip was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 63.02. A level below 30 is defined as oversold while a value above 70 is considered overbought.
As per BSE, the stock has a negative price-to-equity (P/E) ratio of 20.09 against a price-to-book (P/B) value of 3.20. Earnings per share (EPS) stood at (-)30.95 with a return on equity (RoE) of (-)15.95.
Around 9.61 lakh shares were changing hands today. The figure was lower than the two-week average volume of 9.18 lakh shares. Turnover on the counter came at Rs 58.08 crore, commanding a market capitalisation (m-cap) of Rs 38,883.09 crore.