Shares of Paytm (listed as One97 Communications) rose more than 3% today after US financial services firm JP Morgan reinstated an overweight rating despite the stock’s 71% drop from its IPO price. Paytm’s target price has been reduced from Rs 1,200 to Rs 1,000 by the brokerage. However, the new target price remains 62% higher than the market price.
Paytm stock reached an intraday high of Rs 639, up 3.5% from the previous close of Rs 617.40 on the BSE.
The large cap stock is trading above its 20-day and 50-day moving averages, but below its 5-day, 100-day, and 200-day moving averages.
However, the stock has lost 52.85 per cent in 2022 but risen 10.81 per cent in a month. Market cap of Paytm stood at Rs 40,848 crore on BSE.
Total 0.96 lakh shares of the firm changed hands amounting to a turnover of Rs 6.01 crore. The stock hit a 52-week high of Rs 1961.05 on November 18, 2021 and a 52-week low of Rs 511 on May 12, 2022.
JP Morgan in a report said, “We believe a sustained improvement in the profit margin contribution at Paytm seen over the last two quarters sets the stage for operating leverage Q2F23 onwards as indirect costs moderate – resulting in a consistent downtrend in Adjusted EBITDA loss and an eventual path to breakeven.”
“Lending business scale up, an increased contribution from devices and credit card sourcing should result in consistent quarterly improvement in contribution profits which should touch near 40 per cent by Q4 of the current fiscal,” the report further added.