Paytm Shares Rise 12% in 5 Days; Should investors buy, hold or sell?

Paytm shares: Paytm new era tech stocks are up 12% in just 5 days. This comes on the heels of a rally in tech stocks globally. Paytm’s share price has continued to rise after hitting new lows of Rs 510.05 each in May 2022. Paytm shares opened higher for the fourth consecutive session in Tuesday’s trading and then hit their intraday high of Rs 723.60 per share on NSE. , registering a rise of around 2% during the intraday session.

Ravi Singh-Vice President and Head of Research-ShareIndia said, “Paytm stock is experiencing a massive rally backed by huge volumes, building on strong demand in technology stocks globally. The title could touch the levels of Rs 750 in this momentum. However, the outlook is still bleak due to EBITDA losses and low profit margins which may take longer to break even.

Data from Trendlyne shows that the average target price of nine analysts on Paytm is Rs 891, which signals a rise of 37% from current levels. One97 Communications’ share price had closed at Rs 620.25 on June 22, 2022 on NSE, with the fintech stock rising more than 12.14% over the past five days.

What are the brokers saying?

Global brokerage Citi has a target price of Rs 915. JP Morgan, on the other hand, maintained its “overweight” rating on the stock with a target price of Rs 1,000.

Macquarie, however, has a target of Rs 450 on Paytm as it believes profitability is still an uphill battle and Ebitda losses could take 12 quarters to break even.

Santosh Meena, Head of Research at Swastika Investmart Ltd. said, “The counter is bottoming out after building a strong base at the 500 level. It is now witnessing a breakout from the symmetrical triangle formation with strong positive divergence from the ROI. It manages to close above its very important moving averages where we can expect immediate targets of 870/990. On the other hand, 650 should act as an immediate and strong support level.

Earlier this month, JPMorgan in a report said it saw Paytm at Rs 1,000, down from the previous target of Rs 1,200. The meter’s target price was Rs 1,350 before that. Even the last target price signals 60% upside potential in the meter.

JPMorgan backed Paytm’s path to profitability, citing reduced adjusted EBITDA loss with better cost control as key drivers for the stock.

The brokerage noted that improving profit markets paved the way for operating leverage from the second quarter.

The Paytm IPO was launched in November 2021 at a price range of Rs 2080 to Rs 2150 per share. It has been listed at a discount and has fallen since listing on the BSE and NSE on November 18, 2021. Paytm’s share price today is around Rs 716, which is still close to 67% below its upper price range of 2,150 rupees per share. . Paytm shares had caused a massive loss to investors after listing in November last year. From highs of Rs 1,955, the stock had bottomed out at Rs 510.05, representing a massive capital erosion of around 73.9%.

The views and investment advice of the experts in this report are their own and not those of the website or its management. Users are advised to check with certified experts before making any investment decision.

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