Shares of One97 Communications, the parent entity of digital payment app Paytm, climbed 20 percent on Tuesday, February 7, after the company narrowed its losses in Q3. The company reported a net loss of ₹392 crore for the third quarter of the current financial year, as against a net loss of ₹778.4 crore for the same period a year ago.
During Tuesday’s trade, the stock opened at a price of Rs. 558.30 per share, closely against the previous close of Rs. 558 per share and grew in the early trading session to touch an intraday high of Rs. 669.60. It was trading at ₹617.65, up by 10.69 percent, at 10:45 a.m. on the BSE.
The stock touched a 52-week high of Rs. 984.50 on February 07, 2022 and a 52-week low of Rs. 438.35 on November 23, 2022, indicating that at the current level, the stock is trading 41 percent above its 52-week low and 37 percent below its 52-week high.
The stock has grown over 9 percent in the last one month. However, in the past six months, it has declined by nearly 26 percent.
On Monday, the company informed through an official filing that its revenue surged 41 percent on-year in the October-December period to ₹2,062 crore, aided by a rise in merchant subscriptions to payment devices and loan disbursals.
The reported operating profit improved by ₹424 crore from the year-ago period, and the margin improved to 2 percent of the revenue from -27 percent a year ago, due to sustained improvement in contribution profit and strong operating leverage.
Paytm's EBITDA (earnings before interest, taxes, depreciation, and amortization), an indicator of operational profit, before ESOP cost margin improved to ₹31 crore during the third quarter ended December 31, 2022.
“UPI incentive will be a one-off and we will explicitly call it out as a one-off. ₹130 crore that we are quoting is for three quarters. The fourth quarter number will be topped on top of it. Because we are calling it a one-time item, we are not calling it free cash flow generative. We would rather say free cash flow generative when we are consistently sure of it,” Vijay Shekhar Sharma, founder and CEO of the company, said.
The value of loans facilitated through Paytm increased over four-fold to ₹9,958 crore in December 2022 quarter from ₹2,181 crore in the same period a year ago.
The average Monthly Transacting Users on Paytm grew to 8.5 crore in December 2022 from 6.4 crore in December 2021.
According to a MintGenie poll, 11 analysts on an average have a ‘BUY’ call on the stock.
