The target price for Paytm shares is Rs 1,100. Bernstein believes Q3 is good and there is much to be happy about.

The target price for Paytm shares is Rs 1,100. Bernstein believes Q3 is good and there is much to be happy about.

Bernstein stated on Monday that there was plenty to be happy about in One 97 Communications Ltd.’s (Paytm) December quarter results. With loan disbursals increasing 6% sequentially, payment volumes soaring from a Christmas boost, and cost management continuing, Paytm is getting closer to profitability. The lenders referred to the quarterly performance as solid in a pretty bleak operating environment.

The target price for Paytm shares is Rs 1,100.

Despite the loss of some items as a result of regulatory actions in January 2024, Bernstein observed that gross merchandise value (GMV) had returned to the quarterly peak observed in December 2023. After stalling around 6.8–6.9 crore during the previous three months, MTUs finally witnessed an upturn in their trend, edging up to 7.2 crore in December.

Paytm shares were up 0.66 percent at Rs 905.80 after the quarterly results. For the shares, Bernstein recommended a target price of Rs 1,100.

Merchant loans remained the primary source of loan disbursements. According to Bernstein, merchant loan disbursals saw a robust 16 percent sequential rise during the quarter, while the overall loan disbursals increased 6 percent QoQ.

“As a result of the industry-wide slowdown in unsecured loan growth, personal loan disbursals decreased by 12% on a quarterly basis.” A larger percentage of merchants led to a robust 34% sequential gain in financial services revenue, according to Bernstein.

Although the average number of sales employees increased by 6% QoQ, the foreign brokerage reported that Q3 was another quarter of strict cost control, with indirect expenses (ex-ESOP) falling 7% QoQ, mostly due to a decrease in non-sales employee costs.

According to Bernstein, Paytm therefore came within touching distance of EBITDA before ESOP level profitability.

According to the report, Paytm’s quarterly GMV nearly reached the top quarterly GMY recorded on December 23 during the festive quarter, surpassing the Rs 5 lakh barrier. “The payment processing margin exceeded the anticipated 3 bps (ex-UP| incentive) range, while the net payments margin remained steady at 10 bps throughout the quarter. Additionally, even though average MTUs fell during the quarter, MTUs recovered on a monthly basis, reaching 72 Mn on December 24 (6 percent above the trough of August-September 24), the report stated.

The brokerage business said that losses decreased more than anticipated and that the company had excellent performance on all fronts. Higher revenue and decreased employee stock ownership plan (ESOP) expenses were the main drivers of this successful performance.

Additionally, Macquarie noted that the company’s gross merchandise value (GMV) had increased significantly and that its operational leverage had continued to improve.

According to its report, the brokerage company thinks that Paytm’s distribution income is at danger of increasing due to the possibility of greater take rates.

The fintech giant stated that its consolidated loss for the third quarter, which concluded in December 2024, decreased to Rs 208.3 crore from Rs 219.8 crore in the same quarter of the prior fiscal year.

said on Monday that its December quarter consolidated loss decreased to Rs 208.3 crore from Rs 219.8 crore in the same quarter of the prior fiscal year.

Five and one analyst, respectively, recommend a “strong buy” and a “buy” on Trendlyne out of 17 analyst recommendations, while six recommend a “hold.” Three analysts advise a “strong sell” on the company, while two experts advise a “sell” rating.

Paytm’s stock has increased 6.7% over the past year, and by 82.4% and 15.3% over the last six and three months, respectively. The stock has dropped 15.2% so far this year.

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