Paytm shares climb 10% today as exchanges revise circuit filter

Shares of One 97 Communication Ltd, the parent company of Fintech platform Paytm, surged nearly 10 per cent during the trading session on Friday. The stock was nearly shy away from its upper circuit limit, before traders booked some profits in the company and stock trimmed its gains.

Shares of Paytm rose nearly 9.62 per cent on Friday to Rs 379.90 on Friday, commanding a total market capitalisation close to Rs 25,000 crore. The stock had settled at Rs 346.55 in the previous trading session. The rise in the stock pushed its price nearly to a month's highs.

As of 11 am on Friday, more than 2.08 lakh shares of One 97 Communications, amounting to Rs 7.61 crore were traded on BSE. Similarly, more than 45.31 lakh equity shares of Paytm worth more than Rs 166.76 crore exchanged on NSE as of the same time.

National Stock Exchange (NSE) has revised the circuit filter limit for Paytm 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 merely 5 per cent.

Shares of Paytm have crashed sharply, halving its value since RBI's order on January 31. The banking regulator directed the fintech platform to wind up its Paytm Payments Bank (PPBL) Ltd business citing regulatory deficiencies, violation of regulatory framework in its functioning.

Paytm said its March 2024 quarter results were impacted by temporary disruption. Paytm reported widening of its consolidated net loss at Rs 549.60 crore in the March 2024 quarter from Rs 219.80 crore in the December 2024 quarter and Rs 168.90 crore in the March 2023 quarter last year. Revenue from operations fell 3 per cent year-on-year (YoY) to Rs 2,267.10 crore.

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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