Vijay Shekhar Sharma has Purchased Nearly 1.72 Lakh Paytm Shares

Vijay Shekhar Sharma bought 1.72 lakh shares in One97 Communications, a Paytm subsidiary. On May 30-31, the Managing Director purchased these shares.

Sharma bought 1,00,552 shares worth 6.3 crore on May 30 and 71,469 shares worth 4.68 crore on May 31, according to regulatory filings.

Sharma’s most recent Paytm buy, though, totals roughly 11 crore rupees.

Sharma was not authorised to buy Paytm shares for at least six months because he was selling his stock in the company’s initial public offering (IPO). Sharma went ahead and bought Paytm shares now that the limitation has been lifted.

Paytm’s stock finished at 629.10 per share on Friday, up 2.64%. Paytm’s market value was 40,812.51 crore at the time of the closing price.

Last year, Paytm’s first public offering (IPO) ran from November 8 to November 11. The IPO’s price range was 2080 to 2150 dollars per equity share. The IPO was worth Rs 18,300 crore.

Sharma wrote a letter to Paytm shareholders in April, stating that the company will break even on operating EBITDA (EBITDA before ESOP expense) in the next six quarters.

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Sharma penned, “Our commercial momentum, scale of monetisation, and operating leverage give us hope. We expect this trend to continue, and I believe we will reach EBITDA breakeven in the next six quarters (i.e., EBITDA before ESOP costs, and by September 2023), considerably ahead of most analysts’ expectations. Importantly, we will do so without jeopardising any of our expansion objectives “PTI broke the story.

Experts are Enthusiastic About Paytm’s Stock After The Company’s FY22 Report

In a research note published last month, ICICI Securities Research Analysts Kunal Shah, Chintan Shah, and Vishal Singh stated, “By FY26E, we expect 18mn-19mn consumers (15% of MTUs) and 1.2mn merchants (>10% of merchants with Paytm devices and >3% of total merchant base) to use the Paytm platform for financing. Financial services revenue is expected to expand at a CAGR of 58% from FY22 to FY26E, accounting for 19% of operating revenue (up from 5%) “nt / 10% in FY21/FY22).”

The group went on to say, “On the back of growing contribution margins and lowering indirect expenditures as a percentage of operating revenues, management is optimistic in attaining operating profitability (positive EBITDA before ESOP cost) by Q2FY24.

We’re keeping our expectations low and believe the company will be EBITDA-positive by FY25E. Based on customer lifetime value methodology, keep the stock at BUY with a target price of Rs1,285 unchanged.”

Furthermore, Paytm, a full-stack payments and financial solutions provider, expects the recent proposal to link credit cards to UPI to be a win-win situation.

Goldman Sachs backed Paytm’s road to profitability, reiterating its ‘Buy’ rating on the company with a target price of $1,070 on May 22, 2022, citing strong and growing monetization from the payments vertical and quick scale-up of financial services.

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In a note dated June 7, Citi expressed confidence in Paytm’s future growth and profitability plans, citing ongoing improvements in payment monetization and the company’s rapid expansion of financial services. It has reintroduced coverage of Paytm with a ‘Buy’ rating and a $915 target price.

Citi and Goldman Sachs, two global brokerages, are also bullish on Paytm, expecting the company to benefit from the integration of credit cards with UPI.

“We expect a favourable impact on Paytm’s payments vertical (more usage of MDR-bearing credit cards), while there could be some increased competition intensity for Paytm’s BNPL offering, but we underline the improved user experience of Paytm’s one-click checkout,” Goldman wrote in its note.

“While Paytm’s BNPL offering may face increased competition (see above), merchant adoption of Paytm Postpaid should be stronger than credit card uptake on UPI, given MDRs for PostPaid (bearing by merchants) will likely remain considerably below credit cards,” Citi wrote in its note.

Paytm’s stock hit a 52-week high of 1,961.05 last year, but it has since fallen sharply. Due to market volatility this year with a macroeconomic backdrop, it hit a 52-week low of $511 per share last month.

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