Shares of One 97 Communications Ltd, the parent company of Paytm, extended its gains for another trading session as the fintech platform entered into a partnership with Samsung. The company informed about this through an exchange filing early on Thursday.
Samsung has launched flight, bus, movies and events ticket bookings on Samsung Wallet, in partnership with One 97 Communications Ltd that owns the Paytm brand, India’s leading payments and financial services distribution company, said the exchange filing with the bourses.
The partnership aims to enhance consumers’ convenience by offering a seamless, integrated booking experience directly through the Samsung Wallet, facilitating access to a wide range of services through Paytm, it said. Samsung is the largest consumer electronics brand in India.
Following the announcement of the deal, shares of Paytm rose more than to Rs 424.40 on Thursday, rising more than 5.40 per cent in the early session with a total market capitalization little less than Rs 27,000 crore. The stock had settled at Rs 402.65 in the previous trading session. The counter has gained about 25 per cent in the last one week, rising from Rs 339.85 on June 5.
The recent rebound has been majorly triggered after the circuit filter revision for the counter. NSE, on June 6, revised the circuit filter for One 97 Communication to 10 per cent from 5 per cent earlier. Until January 31, 2024, the fintech firm was having a circuit filter of 20 per cent but the series of lower circuits and rising volatility led to its circuit filter revision of 5 per cent.
With this partnership, Galaxy smartphone users will now have seamless access to Paytm’s suite of services, including flights and bus bookings, movie ticket purchases, and event bookings, all integrated within the Samsung Wallet. The wallet users can avail the new services by updating their app through the Galaxy Store, the exchange filing added.
In another exchange filing on Wednesday, Paytm said that IRDAI has accepted the withdrawal of the application from the company for the registration of its associate company as a 'general insurance company'. The fintech firm will now focus on insurance distribution rather than insurance manufacturing.
Before this recovery, shares of Paytm have been facing a severe selling pressure after the RBI's imposed a regulatory ban on Paytm Payments Bank (PPBL) in January 2024. The stock had tumbled over 50 per cent from those levels and two-third of its 52-week high. The stock is still 57 per cent down from its 52-week high of Rs 998.30 hit on October 10, 2023.
Macquarie has maintained an 'underperform' rating on Paytm with a target price of Rs 275 on the stock, suggesting another fall of 25 per cent in the stock as the brokerage sees March 2024 quarter as tough one and June 2024 quarter is likely to be tougher one for the company.
Motilal has cut its earnings estimates and projected Paytm to achieve Ebitda breakeven in FY26. "We value Paytm based on 15 times FY28E Ebitda and discount the same to FY26E at a discount rate of 15 per cent. We thus value the stock at Rs 400, which implies 2.3 times FY26E P/Sales," it added with a 'neutral' rating.
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