Shares of Paytm reach a high of 18 months as Bernstein begins coverage with a “Outperform” rating
After brokerage firm Bernstein began to cover the stock, shares of One 97 Communications Ltd., the company that owns the payments platform Paytm, increased by roughly 3% and reached an 18-month high.
With a price objective of Rs 1,100, or a potential gain of 22% from present levels, Bernstein has given the shares of Paytm an outperform rating. In the previous three trading sessions, the stock rose by about 10%.
On February 10, 2022, the stock traded over Rs 920 for the final time.
The share price of Paytm has increased significantly during the last six months. It has increased by about 49% over the last six months, whereas the Sensex, a measure of equities performance, has only increased by approximately 11% during the same time frame.
In a note, Bernstein said that Paytm is on the right side of the industry upheaval since it is showing early evidence of having an advantage in digital lending. Paytm has been successful in doing this by using its powerful digital payment systems.
The brokerage also projects that by the conclusion of the company’s fiscal year 2026, its loan disbursal volumes will have increased significantly and will have a market share of close to 4% in the high-yield (above 13%) household lending sector.
During the June quarter, Paytm disbursed loans via the platform totaling Rs 14,845 crore. Through the platform, 1.28 crore loans were given in total, an increase of 51% over the previous year.
Additionally, Bernstein anticipates the firm to break even by the financial year 2025 and produce an earnings per share of Rs 130 by the financial year 2030 since the margins in the payments industry are stabilizing.
The third-highest price estimate for the stock on the market is set by Bernstein at Rs 1,100. Prior to Bernstein, Citi, Goldman Sachs, and Dolat Capital each had price targets of Rs 1,200, whereas Bernstein has a goal of Rs 1,260.
Even while the stock has increased significantly after hitting an all-time low of Rs. 438 earlier this year, it is still approximately 55% below its IPO price of Rs. 2,150.
