Paytm has been one of the most talked about stocks in 2022. After a disastrous IPO and Paytm shares price crash, Paytm is staging a remarkable comeback. Its share price has surged over 50% in 2023 so far.
With a positive outlook from analysts and strong quarterly results, Paytm’s share price seems to be gaining momentum. For stock market beginners, Paytm provides an interesting case study to understand factors affecting a stock’s price movements.
This beginner’s guide will help you track and understand Paytm’s share price performance. We will cover the following topics:
What is Paytm and its business model
Paytm started as a digital payments company in 2010. Over the years, it has expanded into a financial services company providing services like digital payments, banking, lending, insurance, wealth management and more.
Paytm makes money through transaction fees, subscription fees, interest on loans and commissions from financial products. It has 337 million registered consumers and over 22 million merchants.
Paytm’s stock journey so far
Paytm had a much-hyped IPO in November 2021 at a price of Rs 2,150 per share. However, the stock listed at a discount of over 27%. This was followed by a continued slide in share price throughout 2022.
Reasons for Paytm’s weak stock performance post-IPO included high valuation, regulatory uncertainties, mounting losses and competition from deep-pocketed players.
But in 2023 so far, Paytm stock has made a stellar comeback rising over 50% year-to-date. Let’s look at the factors behind this revival.
Tracking Paytm share price movements
Paytm share price today: As of October 13, 2023, Paytm share price closed at Rs 575.85, up 4.65%. This is significantly higher than its IPO issue price and 52-week low of Rs 511.25.
- Short term tracking: To track short-term price movements, check Paytm share price daily. Compare closing price with previous day close.
- Long term tracking: For long term view, check Paytm share price weekly or monthly. Observe the trends over weeks and months.
- Volume data: Higher volumes signal increased activity. Low volumes may indicate lack of interest.
- Technical indicators: Indicators like RSI, moving averages can help identify trends and reversals.
- Resistance and support: Price levels where uptrends or downtrends slow down or reverse.
Factors impacting Paytm share price
Stock prices are impacted by both internal and external factors. Here are some key factors affecting Paytm’s share price:
- Financial results – Revenue, profitability, user growth
- New product launches
- Loan book growth
- Management commentary
- Overall market trends
- Investor confidence
- Analyst recommendations
- Competitive landscape
- Economic growth, inflation, interest rates
- Government regulations
- Global factors like oil prices, currency rates
By tracking these factors, we can better understand Paytm’s share price movements.
Decoding Paytm’s share price surge in 2023
After a terrible 2022, what has led to the turnaround in Paytm stock in 2023? Here are some key reasons:
- Strong Q1 results – Paytm posted robust 89% growth in revenue and significantly reduced losses in Q1 FY23 results. This indicated the company was firmly on path to profitability.
- Optimism about loan business – Paytm has been rapidly growing its loan disbursals. It disbursed 8.5 million loans in Q1 FY23, up 492% YoY. The huge growth potential of this business is attracting investors.
- New product launches – Recent product launches like Paytm Super App subscription, Postpaid Mini, bank fixed deposits etc. have expanded Paytm’s monetization avenues.
- Support from large investors – Top investors like Ant Group, Softbank, Berkshire Hathaway have increased holdings and reiterated their confidence in Paytm’s prospects.
- Improved market sentiment – After massive selloffs in 2022, investors have returned to quality stocks. Also, high quality stocks with long runways for growth are back in favor.
How high can Paytm stock go? Analyst targets
Many analysts have turned positive on Paytm after the recent surge and strong performance. They expect the uptrend to continue.
- Morgan Stanley – Target increased from Rs 785 to Rs 955 per share
- JP Morgan – Target raised from Rs 1,000 to Rs 1,200 per share
- HSBC – Paytm price target increased from Rs 755 to Rs 1,000
- Macquarie – Paytm stock rating upgraded from Underperform to Outperform, target lifted from Rs 450 to Rs 800.
The new analyst targets indicate further upside potential in Paytm stock from current levels.
Should you buy Paytm shares?
Here are some things to consider before buying Paytm shares:
- Risk appetite – Paytm shares are still volatile compared to large established companies. Assess your risk tolerance.
- Valuation – Though lower than IPO price, Paytm still trades at high valuations. Invest only if you have conviction in long term growth.
- Portfolio goals – Analyze how Paytm stock fits into your investment objectives, time horizon and portfolio allocation.
- Company prospects – Do your research on Paytm’s financials, growth forecasts, competitive landscape and management.
- Market trends – Consider overall market direction and sentiments while investing.
How to buy Paytm shares?
If you decide to invest in Paytm, here are the steps to buy its shares:
- Open a demat and trading account with brokerage like Zerodha, Upstox etc.
- Transfer funds to your trading account.
- Place a buy order for Paytm stock on NSE or BSE through your broker’s trading platform or app.
- Specify number of shares and target price at which you wish to buy.
- You will receive the shares in your demat account once the order is executed.
Additionally, you can also buy Paytm shares via mutual funds that hold the stock.
The road ahead for Paytm
Paytm has multiple drivers for sustained growth in the coming years:
- Rapid growth in financial services like lending, insurance, wealth management
- Increasing monetization of payments and commerce business
- New product initiatives in high potential areas like cloud, advertising, SaaS
- Operating leverage kicking in as revenue scales up
- Potential for inorganic expansion through strategic partnerships and acquisitions
However, Paytm does face risks from high competition and the evolving fintech regulatory landscape. Execution of plans while maintaining quality will be key.
Overall, Paytm seems to be making progress towards profitability while maintaining healthy growth. Its strong base of consumers and merchants makes it well placed to tap the huge growth potential in digital payments and financial services in India.
We have examined Paytm’s share price performance using a beginner’s lens in this guide. By tracking price movements, understanding key drivers and doing adequate research, retail investors can make informed decisions on Paytm stock investments.
While risks remain, the balance seems to be tilting in favor of optimists as the recent surge in Paytm share price shows. However, as with any stock, it is best to approach Paytm with a long-term perspective instead of short term speculation.