This Fintech Stock Zoomed 13% In 1 Week, Trading Near 52 Week Low, Buy For 145% Robust Gains

ICICI Securities has maintained its positive outlook on One97 Communications Limited (Paytm). The brokerage has assigned a buy call on the stock for robust gains of up to 145% with an unchanged target price of Rs 1,285 per share.

Paytm is a Mid Cap Fintech company having a market cap of Rs 34,105.78 crore. It is India's leading digital ecosystem for consumers as well as merchants with a more than 333 million client base and 21 million registered merchants to whom it offers financial services, payment services, and commerce and cloud services.

Stock Outlook & Returns

The shares price of Paytm on NSE is currently Rs 524.40 per share, trading 4.66% up from its previous close of Rs 501.05 per share. Today, it opened at Rs 507.50 per share. It recently hit its 52-week low on 23 November 2022, trading around 20% up from its 52-week low, which is Rs 438.35. Its 52-week high is Rs 1,725, recorded on 1 December 2021.

The stock in a week has jumped 12.58%, however, in a month, it fell by 18.5%, and in 3 months fell by 27.98%, respectively. In a year, it fell by 67.29%. Since its listing on 18 November 2022, it fell by 66.33%. 

Management expects positive FCF generation in 12-18 months; no onerous outcome of regulatory observations

One 97 Communications (Paytm) during its analyst meet yesterday (1st Dec'22) reiterated its continued focus on improving profitability. Management stated that the journey to attain operating profitability (EBITDA before ESOP cost) via consistent margin improvement has exceeded its expectations in the past few quarters. It further emphasised its target to become an FCF-generating company in the next 12- 18 months. Management also enhanced clarity around the company's business model by providing additional disclosures with respect to net payment take-rate of 7-9bps, average subscription fee (of Rs100 per month per active device), 2.5-3.5% take-rate on loan sourcing and 0.5-1.5% on collections, etc. Besides, the management pointed at growth drivers in the various business segments and threw light on how it plans to generate free cash flow (FCF). Lastly, clarifications provided around regulatory developments with no onerous outcome provide further comfort. Maintain BUY with an unchanged target price of Rs 1,285 based on customer lifetime value methodology. 

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.