Shares of One97 Communications, the parent company of payment aggregator Paytm, fell as much as 7.5 percent to Rs 907 per share on January 8 after a UBS report showed Paytm did not gain any UPI market share in December, according to NPCI data.
Despite getting approval to add customers in October, Paytm’s UPI market share has nearly halved, falling from 10 per cent at the start of 2024 to just 5.5 percent by the end of the year. Even during the October-November period, Paytm’s market share remained stable at 5.5 percent.
Paytm’s monthly transacting users (MTUs) have also declined by about 100 million, from 168 million at the start of 2024 to 68 million by the end of September 2024.
Emphasising that MTU growth is crucial for B2C offerings, analysts at UBS maintained a “neutral” rating on Paytm with a target price of Rs 1,000 per share.
In a recent note, Mirae Asset Capital Markets estimated that Paytm would achieve breakeven at the net profit level by Q4FY26, led by higher contribution from financial services to its revenues.
Despite regulatory setbacks that led to lower monthly transactions (100 million in Q3FY24 compared to 71 million in Q2FY25), Paytm’s merchant base has remained stable at 42 million due to strategic efforts to retain existing merchants on its platform.
For the upcoming quarter, analysts at Motilal Oswal forecast a 10 per cent quarter-on-quarter (QoQ) growth in Paytm’s gross merchandise value (GMV) to Rs 4.9 lakh crore in Q3FY25.
They also expect an 8 per cent quarter-on-quarter growth in revenue from operations to Rs 1,800 crore, along with a 14 per cent quarter-on-quarter growth in contribution profit to Rs 1,012 crore in Q3FY25.
Earlier, Paytm reported a consolidated profit of Rs 928.3 crore in Q2FY25, boosted by the sale of its movie ticketing and events business to Zomato.
Paytm is covered by 17 brokerage firms, of which 6 have recommended “buy”, 6 have issued “hold” ratings, and 5 have given “sell” calls.
In the past three months, Paytm shares have gained over 22 per cent, outperforming the Nifty 50’s 4 per cent decline. However, the stock is still trading over 50 per cent below its IPO price of Rs 2,150 per share.