Paytm shares turn multibagger! Stock up 104% from record lows; is the worst behind?

Shares of One 97 Communications Ltd (Paytm's parent) saw a massive spike in Friday's late trading session. The stock zoomed 13.86 per cent to hit a day high of Rs 631.30. At this price, the stock has turned multibagger by rebounding 103.64 per cent from its all-time low value of Rs 310, a level seen on May 9 this year.

The digital payments firm recently sold its entertainment ticketing business to online food aggregator Zomato for Rs 2,048 crore. The fintech firm has been under tremendous pressure since Reserve Bank of India (RBI) announced restrictions on Paytm Payments Bank's operations last year amid persistent non-compliance and continued material supervisory concerns.

"Regulatory concerns and risks will remain the same. Only risky investors can bet right now with a medium- to long-term," Prashanth Tapse, Senior VP (Research) at Mehta Equities, told Business Today TV.

"I think the worst is behind. We may see some volatility because of the RBI intervention and scrutiny of the IPO money. So, not a buyer at this point of time but any dip will be a good buying opportunity," Tapse also said.

On technical setup, analysts largely suggested booking profits at current levels. With that being said, a decisive close above Rs 650 level is required for more upside.

"Paytm has recently experienced a series of higher highs, particularly after reaching a low point in May, and has maintained this trend until now. At present, Rs 530-520 is likely to cushion the trend. On the higher end, as the counter enters a broad bearish gap, there is no specific resistance. Therefore, it is advisable to trail profits till the momentum persists," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

Investors should consider booking profits around Rs 630 levels, said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking. Support will be at Rs 610, Singh added.

"Support will be at Rs 600 and resistance at Rs 650. A decisive close above Rs 650 level may trigger a further upside towards 685. The expected trading range will be between Rs 600 and Rs 700 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

The scrip traded 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 72.55. 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 17.92 against a price-to-book (P/B) value of 2.86. Earnings per share (EPS) stood at (-)30.95 with a return on equity (RoE) of (-)15.95.