Paytm shares down 5% after rising for two consecutive days
Paytm share price witnessed a 5% decline, reaching its lower circuit at ₹406.1. Despite Vijay Shekhar Sharma's resignation as part-time non-executive chairman and board member at Paytm Payments Bank, investors remained unsettled. The scrip declined today after hitting 5 percent upper circuit for two consecutive trading sessions.
Also read: Lok Sabha elections: Nifty 50 rallied 4 out of 5 times after results, Bank Nifty outperformed “Paytm will likely experience near-term financial impact on its business along with some permanent loss of business in FY25E," global brokerage firm UBS was quoted as saying by The Economic Times. "We expect Paytm to lose 5-7ppt of its 25% share in the payments industry, driven by loss of wallet (2-3ppt permanent loss) and the rest due to merchant/customer churn. We estimate net payments margin to decline to 6-7bp range from 7-9bp range, given loss of high-margin wallet business and likely easier terms to retain merchants," it said.
UBS reaffirmed its ‘Neutral’ rating on Paytm while revising down its target price from ₹650 to ₹510. It further added, "Loan origination will likely be paused for most of Q4 and then only pick up post stabilisation of payments business in FY25E. We forecast loan disbursements to decline 14% YoY in FY25E.
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