Paytm share price falls over 3% after Q2 results; analysts expect up to 41% upside; should you buy?

livemint.com:

₹292 crore for the second quarter of FY24. Paytm shares declined as much as 3.47% to ₹953.00 apiece on the BSE. One 97 Communications, the parent company of fintech giant Paytm, narrowed down its loss in Q2FY24 by 49% from ₹1,914 crore reported in the year-ago period.

The Vijay Shekhar Sharma-led company recorded a consolidated revenue from operations of ₹2,519 crore in the September quarter, registering a growth of 32% as compared to ₹1,914 crore reported in the year-ago period. The fintech major recorded a negative earnings before interest, depreciation, taxes and amortisation (EBITDA) of ₹232 crore in Q2FY24, which is lower as compared to an EBITDA loss of ₹538 crore, YoY. Read here: Paytm Q2 results: Revenue rises 32%, net loss narrows to ₹292 crore However, most analysts expect the company's operating leverage to drive operating profitability and to achieve net profitability by H2 of FY25E.

Here’s what brokerages have to say on Paytm Q2 results and Paytm shares: Paytm's Q2 results were largely inline with BoFA Securities’ revenue estimates but EBITDA was better than its estimates led by steady payments growth and credit uptake. Slower loan growth was inline with its expectation as Paytm was consciously looking to prune growth on loan side and focus on portfolio quality. Post Q2, BofA Securities raised its FY24 and FY25 EPS to ₹-14.9 and -2.1.

It reiterated its ‘Buy’ rating on Paytm and raised the target price to ₹1,165 per share from ₹1,020 earlier on favorable risk reward. Goldman Sachs sees upside to both Paytm earnings and multiples, as it expects continued momentum in lending and payments, with strong operating leverage in the business model. In addition, resolution of outstanding regulatory issues, and/or