Today’s Stock Market: Since the Reserve Bank of India took action against One 97 Communications (Paytm), the share price of the payment bank has dropped by more than 40%. In its primary business sectors, One 97 Communications (Paytm) is anticipated to announce a notable drop in revenue for the quarter ending in June 2024.
Indeed Securities predicts a sequential reduction in payment services to consumers, merchants, financial services, and other entities, leading them to arrive at an overall sequential de-growth in revenue from operations of 32% by One 97 Communications (Paytm) for the first quarter.
Yes, Securities projects a 40% sequential decline in consumer payments services, a 35% sequential decline in merchant payments services, and a 30% sequential decline in financial services and other categories.
Primarily because of the UPI incentive received in Q4FY24, Payment Processing Charges (PPC) revenues as a percentage of Payments are expected to be 55.5%, up from 46% in Q4FY24.
Following a 12% decline in 4QFY24, a 7% sequential increase in total expenses (excluding PPC) is anticipated. Yes, Securities arrives at an EBITDA margin of 60.4% after deducting the cost of ESOP and other expenditures, which represents a sequential decline of 5,050 basis points.
Additionally, Motilal Oswal Financial Services projects that its operations’ revenue would drop 36% YoY to approximately ₹1490 crore, and its contribution profit will drop 51% YoY to approximately ₹640 crore in 1QFY25. Motilal Oswal predicts that in 1QFY25, Gross Merchandise Value will drop 7% YoY to ₹4.3 trillion. Additionally, the contribution margin is fixed at 43 percent. In the first quarter of FY25, they project an adjusted operating loss of ₹490 crore. The stock is presently rated as Neutral by Motilal Oswal Financial Services.
Nonetheless, One 97 Communications (Paytm), which is currently trading at ₹434, is still one of StoxBox’s recommendations. It has a target price of ₹449 and a stop loss of ₹398. According to Stoxbox, Paytm expects to break even on its equity by FY25 and has a sizable, active user base. According to them, the company is a compelling purchase at these prices since it has recently displayed possible trend reversal patterns on the technical charts.
Monitorable Key
Any additional effects of the RBI notification are a critical metric to be tracked, according to Motilal Oswal Financial Services.
Read Also: Paytm shares are under pressure, with block trades affecting up to 1.1% of equity
