Paytm shares rising ahead of Q4 results; will margin print boost sentiment?

Shares of One 97 Communications Ltd (Paytm) jumped 4 per cent in Friday's trade, as a host of brokerages expect the company to report strong set of results later today. Goldman Sachs recently said Paytm’s margin print for the March quarter will help further increase the Street’s confidence around the increasing traction of Paytm’s business model and the company’s ability to be profitable on a sustained basis.

The stock rose 3.95 per cent to hit a high of Rs 697.55 on BSE.

Goldman Sachs is expecting a 49 per cent YoY jump in revenues and a 10 per cent adjusted Ebitda margin for Paytm in the Mach quarter. It sees 3 per cent margin, excluding Rs 170 crore of estimated UPI incentives. This is against a minus 24 per cent margin in the year-ago quarter.

Paytm reported gross merchant value (GMV) of Rs 3.6 lakh crore, up 40 per cent, which Goldman Sachs says could be 24 per cent share of India’s digital payments. It said Paytm’s March quarter GMV growth of 5 per cent sequentially represents a modest deceleration against a 9 per cent QoQ growth in the December quarter, which is likely a function of adverse seasonality.

YES Securities expects overall growth in revenue from operations of 17.8 per cent QoQ at Rs 2,430 crore. It sees its Ebitda loss and net loss contracting for the given period.

Citi expects net payment margins at 15.7 basis points (bps), up 240bps QoQ. "We estimate contribution margins at 52.8 per cent and adjusted EBITDA and EBIT margins at 4 per cent and -3 per cent, respectively.

Citi pegs Paytm's revenue at Rs 2,274 crore, up 48 per cent YoY and 10 per cent QoQ, while it's GMV is seen at Rs 362crore, up 40 per cent YoY and 5 per cent QoQ. The fintech major is likely to report and adjusted Ebitda at Rs 86.6 crore in Q4FY23 against a loss of Rs 367.6 crore in Q4FY23 but a rise of 177 per cent QoQ. Its Ebitda margins are seen at 4 per cent, 230 bps on QoQ basis.

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