Shares of One 97 Communications (Paytm) climbed 4 per cent in Friday’s trade amid hopes the company would be able to beat September 2023 breakeven guidance. The scrip rose amid a media report that quoted Paytm’s Vijay Shekhar Sharma as suggesting that the company might be able to deliver profit much before its guidelines.
ET NOW reported Sharma as saying that the picture would be far clearer after December quarter results. Sharma told ET NOW Berkshire still holds as many Paytm stake as it held on of first day and said his company will stick to core business to generate money. Shankar told ET NOW that there has been a quantum leap in his company’s business model, adding that Paytm will continue to invest in new businesses.
Following the development, the scrip rose 4.24 per cent to hit a high of Rs 554.95 on BSE.
Earlier this week, Goldman Sachs said Paytm could be Ebitda profitable by March quarter — two quarters ahead of guidance and expected December quarter to be another strong quarter for Paytm, with revenue growth of 45 per cent YoY and further improvement in adjusted Ebitda losses (by 58 per cent sequentially) to Rs 70 crore.
“We believe Paytm’s margin print in Q3 would further increase the Street’s confidence around the company’s ability to be profitable in CY23. Paytm’s MTU (monthly transacting users), loan disbursals and devices deployed continue to surprise us positively, and we have further raised our estimates for these metrics in this note; however, mix shift towards UPI has also been faster, resulting in cuts to our payment revenue estimates,” Goldman Sachs said.
Paytm’s valuation multiples are at a discount to global peer group, for a growth outlook that is better or in-line with peer group, Goldman Sachs said.
For the December quarter, Paytm in a business update earlier this month said total merchant gross merchandise value (GMV) processed through its platform aggregated to Rs 3.46 lakh crore ($42 billion), marking a 38 per cent YoY growth.
“Our focus over the past few quarters continues to be on payment volumes that generate profitability for us, either through net payments margin or from direct upsell potential,” it said.
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