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    This analyst who predicted slump in Paytm further reduces target price on stock, shares fall 3%

    This analyst who predicted slump in Paytm further reduces target price on stock, shares fall 3%

    This analyst who predicted slump in Paytm further reduces target price on stock, shares fall 3%
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    By CNBCTV18.com  IST (Updated)

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    Shares of One 97 Communications - Paytm's parent company - fell as much as 3.05 percent on Thursday after Macquarie Securities India’s Suresh Ganapathy, one of the most bearish analysts on Paytm- slashed its price target on the stock by a staggering 35 percent to Rs 450. The brokerage maintained its 'underperform' rating citing lower valuations for fintech companies globally.

    Shares of One 97 Communications - Paytm's parent company - fell as much as 3.05 percent on Thursday after Macquarie Securities India’s Suresh Ganapathy, one of the most bearish analysts on Paytm- slashed its price target on the stock by a staggering 35 percent to Rs 450.
    The brokerage maintained its 'underperform' rating citing lower valuations for fintech companies globally. At 11:30 am, shares of Paytm were trading at Rs 618.55, down 15.85 points, or lower by 2.50 percent on the BSE.
    "Globally, Fintechs have corrected sharply. When we initiated on Paytm, Fintechs globally traded at 0.3x-0.5x PSg (price to sales growth ratio). However, multiples have now declined to 0.07x-0.35x. Our benchmark valuation for PayTM has been the valuation of global Fintechs. As a result, we now value it at 0.2x PSg vs the 0.35x PSg used earlier, thereby arriving at a fair price of Rs450. Note that we haven’t changed our earnings or revenue estimates for Paytm," Macquarie Securities noted.
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    Shares of Paytm have fallen close to 70 percent from its initial public offering price of Rs 2,150. The company’s IPO was launched in November 2021.
    This makes Paytm one of the biggest wealth destroyers in the newly-listed universe.
    Macquarie house believes that Paytm will face more headwinds on the regulatory side because of impending regulations from the RBI on digital payments, buy-now-pay-later, stricter know-your-customer and compliance norms.
    RBI has barred Paytm Payments Bank - the payments bank unit of the company - from taking on new customers. The banking regulator has also ordered a comprehensive audit of its IT systems.
    The RBI has cited “material” supervisory concerns observed in One97 Communications’ payments bank, without elaborating.
    Paytm has said it is taking immediate steps to comply with RBI directions, including appointing an IT auditor. The digital payments company believes the ban will not have a material impact on its overall business.
     
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