Paytm slips 9% intra-day as nearly 5% equity changes hands on NSE

Shares of digital financial services firm One97 Communications, which owns Paytm, slipped 9 per cent to Rs 640 on the National Stock Exchange (NSE) in Friday’s intra-day trade on the back of heavy volumes.

At 09:50 am; the stock of the payments and financial services company was quoting 6 per cent lower at Rs 664.80 on the NSE. Around 32.25 million equity shares, representing nearly 5 per cent of total equity of Paytm, had changed hands on the counter, the exchange data showed.

Meanwhile, a combined 33.28 million equity shares had changed hands on the NSE and BSE. The names of the buyers and sellers were not ascertained immediately.

In the past four trading days ( as of Thursday), the market price of Paytm had zoomed 34 per cent after the company reported an improved financial performance in the October-December quarter (Q3FY23).

In Q3FY23, Paytm’s Ebitda (earnings before interest, taxes, depreciation, and amortization), an indicator of operational profit, before ESOP cost margin, improved to Rs 31 crore. The company said it achieved operating Ebitda profitability three quarters ahead of guidance, driven by revenue growth across businesses, disciplined cost management, and operating leverage.

Paytm narrowed its consolidated net loss to Rs 392 crore in Q3FY23. The company had posted a net loss of Rs 778.4 crore in the same period a year ago. Its revenue from operations jumped about 42 per cent to Rs 2,062.2 crore during the quarter from Rs 1,456.1 crore in the year-ago period. The contribution profit, which excludes taxes and marketing cost, more than doubled to Rs 1,048 crore during the reported quarter on YoY basis.

Global brokerage Macquarie double upgraded the stock to ‘outperform’ from ‘underperform’, increasing the target price by a whopping 80 per cent, on Wednesday as it sees a very visible change in the management’s approach.

“At the time of listing, profit, and free cash flow were not even a part of management’s discussion. However, we see a very visible change in approach of management to deliver profit, evidenced by the core Ebitda profitability that was reported in Q3,” Macquarie said.