Paytm, a leading fintech company, has received an upgrade in its target share price to INR 700 by Yes Securities in its quarterly projections for Q4FY23. While the firm has maintained a neutral rating for Paytm, it has predicted a 57.7% YoY and 17.8% QoQ increase in the company’s revenue for Q4FY23, which is expected to reach INR 2,430.3 Cr. However, the brokerage firm has also estimated that Paytm will post a net loss of INR 307.3 Cr in the quarter that ends on March 31, 2023.
Yes Securities has projected healthy sequential revenue growth for Paytm due to steady loan disbursements and new device addition. In March 2023, Paytm disbursed 4.1 million loans amounting to INR 4,468 Cr with YoY growth of 63% and 206%, respectively. The brokerage firm has also projected a QoQ increase of 18% in Paytm’s revenue from operations, along with a 63.5% improvement in payment processing charges (PPC) as a proportion of payments revenue. Additionally, Yes Securities expects Paytm’s EBITDA margin to improve by 583 bps QoQ.
Paytm’s shares surged to an intraday high of INR 661.70 and closed at INR 655.65 apiece at 3.10 PM on Monday, April 10, approximately 2% higher than the last close of INR 645.80 apiece. The upgrade in target share price follows Paytm’s EBITDA of INR 31 Cr during the quarter ended March 31, 2023, leading to the fintech giant claiming that it turned EBITDA positive, without ESOP cost.
Paytm has been busy upgrading its tech stack and enabling interoperability of its wallet for UPI transactions, which is expected to increase the fintech’s tech stack’s scale by 10X and bring in more revenue for the company in interchange fees. Additionally, Paytm has received more time from the RBI to reapply for the payment aggregator license, subject to the Centre’s approval of the investments made by Paytm into Paytm Payments Services Limited (PPSL), a wholly-owned subsidiary of the fintech that handles the B2B payments business.
