Bernstein has reiterated its ‘outperform’ rating on One97 Communications Limited (Paytm), highlighting a strong quarter with signs of recovery in key metrics. The brokerage firm has set a target price of ₹1,100 per share, indicating a potential upside of 23% from the last closing market price of ₹895 (as of January 16, 2025).
Key Highlights from Bernstein’s Report:
- GMV Recovery and Payment Margins: Paytm’s quarterly Gross Merchandise Value (GMV) grew by 13% sequentially, nearing the peak levels of December 2023. The net payment margins were stable, aligning with the guided range of 3 bps despite regulatory changes.
- Improved MTU Trajectory: Monthly Transacting Users (MTUs) reached 72 million in December 2024, marking a recovery after stagnating around 68–69 million in recent months.
- Loan Disbursals Growth: Total loan disbursals increased by 6% QoQ, driven by a 16% growth in merchant loans. Personal loan disbursals declined by 12%, reflecting the sector-wide slowdown in unsecured loan demand.
- Cost Control and Profitability: Stringent cost management led to a decline in indirect expenses by 7% QoQ, excluding ESOP costs. Employee expenses saw a 6% QoQ increase due to annual raises, but the company inched closer to profitability with improved EBITDA before ESOP adjustments.
Earlier today, One97 Communications Limited (Paytm) announced its consolidated financial results for the quarter ended December 31, 2024. The company posted an increase in operational income on a sequential basis but reported a loss due to higher expenses.
Key Financial Metrics (₹ in Crore):
Revenue from Operations:
- Q3 FY25: ₹1,827.8
- YoY Change: -35.8% (₹2,850.5 in Q3 FY24)
- QoQ Change: +10.2% (₹1,659.5 in Q2 FY25)
Net Loss:
- Q3 FY25: ₹(208.5)
- YoY Change: -5.9% (₹(221.7) in Q3 FY24)
- QoQ Change: N/A (against a profit of ₹930 in Q2 FY25)
Total Income:
- Q3 FY25: ₹2,016.5
- YoY Change: -32.7% (₹2,999.1 in Q3 FY24)
- QoQ Change: +9.9% (₹1,834 in Q2 FY25)
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
