Paytm share price gains as Q1 net loss narrows; brokerages raise target

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₹apiece on the BSE. One 97 Communications, the parent company of Paytm, narrowed its consolidated net loss to ₹357 crore in the April-June 2024 period from ₹644 crore in the corresponding period last year.  However, the company’s net loss has widened when compared to a loss of ₹168 crore reported in the March quarter. Paytm’s revenue from operations during Q1FY24 rose 39.4% to ₹2,341 crore from ₹1,679 crore in the year-ago period.

Paytm's credit distribution business jumped 167% YoY, disbursing ₹14,845 crore in loan value. The overall number of loans facilitated on the payments platform registered a 51% increase at 1.28 crore, according to a regulatory filing by One97 Communications. Read here: Paytm Q1 Results: Fintech giant's net loss narrows to ₹357 crore, revenue up 39%; check details Most brokerages raised the target price on Paytm stock after the healthy growth in business metrics.

Here’s what brokerages said: Paytm’s Q1 Ebitda ex-ESOP was marginally higher than CLSA’s estimate, with in-line revenue but lower processing costs. Core business metrics were strong with GMV growth of 37% YoY and lending disbursements up 18% QoQ. “Fixed costs, ex-ESOP, were up 14% QoQ as the company continues to increase manpower.

We understand the need to capture growth opportunities, but we struggle to understand what the company will do with so many employees in five years," CLSA said. The global brokerage increased its FY25-26CL core Ebitda estimates 9%-12% to factor in healthy business growth and higher net take rates. It expects Paytm to generate free cash flow over the next few quarters.  It maintained a ‘Buy’ rating on the stock and raised the target price to ₹1,050 per share from ₹850 earlier.