Paytm shares on a roll! Is it a fluke or is it time finally to buy the stock?

Shares of fintech major Paytm jumped over 14 per cent to hit an intraday high of Rs 701.85 on BSE. Currently, the stock is down 64 per cent from its all-time high of Rs 1,961.05.

It closed 11.58 per cent higher at Rs 688.60 against the previous close of Rs 617.15 on the BSE. The market cap of the firm rose to Rs 44,659.94 crore.

While sharing his advice with investors, Santosh Meena, Head of Research, Swastika Investmart said, “Some investors are finding it attractive at current levels due to its brand value, however, there are still uncertainties about the timing of its profitability whereas there is no leadership in any particular business. We are expecting some recovery in this counter due to bargain buying where we can expect Rs 770-Rs 870 levels in the coming days. However, conservative investors should completely avoid this stock."

"Paytm after witnessing consolidation at lower levels is now trading well above the major long-term support levels. On the Bollinger band (20,2) the stock price is trading above the mean with the upper band facing in the northward direction indicating the price is likely to move towards the 680-690 levels," Dr. Ravi Singh-Vice President and Head of Research-ShareIndia told Business Today.

"Analysing the recent volume price action, the volumes have been encouraging in the recent up move indicating strong hands have started accumulating the stock at current levels. However, it’s advisable that investors must take this opportunity to book their long holdings only and should avoid taking any fresh positions at current levels," he added.

According to Ravi Singhal, Vice Chairman, GCL securities Limited, there is a small bounce back in the stock after a long correction. The share price is expected to rise and can touch Rs 800 levels in the short term. Investors should put a Stop Loss of around Rs 600 per share.

Recently, the company released its operating metrics for the fourth quarter. Paytm said that the lending business has scaled to 6.5 million loan disbursals, which is a 374 per cent on-year growth, during the quarter ended March. This aggregates to a total loan value of Rs 3,553 crore, which is a year-on-year growth of 417 per cent.

The offline payments business has accelerated by 90,000 devices this quarter, taking the total number of deployed devices to 2.9 million in three years. Paytm further added that it presently deploys about 1,000 devices per day. They also expect a rise in the number of merchants eligible for loans.

The average monthly transacting users (MTU) of Paytm Super App for the quarter has also grown 41 per cent YoY to 70.9 million.

Vijay Shekhar Sharma, founder and CEO, believes that the company should be operating EBITDA breakeven in next 6 quarters (i.e. EBITDA before ESOP cost, and by the quarter ending September 2023), well ahead of estimates by most analysts.

"Against the backdrop of volatile market conditions for high growth stocks globally, our shares are down significantly from the IPO price," Sharma added.