Paytm, which has moved dramatically from listing after India’s largest initial public offering, has received its first buy rating from a brokerage that expects the company to become profitable by March 2026.
Dolat Capital Market Pvt, the third brokerage firm to initiate coverage of the digital payments giant after Macquarie Capital Securities and JM Financial Institutional Securities Ltd. and the strong increase in the number of users will help the company.
Paytm’s “super app” came out of a category of pure “desire” to reach the status of “need,” said Dolat analysts led by Rahul Jain. They position the company as “one of the strongest digital brands to achieve a significant share of opportunities that will evolve in the Indian Internet ecosystem,” they said.
The brokerage has set a target price of 2,500 rupees ($ 33.4), which is 16% higher than the company’s issue price. Paytm was down 2.7% to Rs 1,592 on Thursday, its fifth day of declines, after falling 37% in the first two trading sessions. JM Financial has a stock rating for shares, while Macquarie rated it as underperforming.
One 97 Communications Ltd., the parent company of Paytm, raised $ 2.5 billion in IPOs, but its debut disaster made it one of the worst initial appearances of a large dot-com technology company. -com since the late 1990s. Paytm has the support of some of the world’s top investors, including SoftBank Group Corp. of Masayoshi Son, Berkshire Hathaway Inc. from Warren Buffett and Jack Ma’s Ant Group Co.
Paytm reported its first financial results as a public company over the weekend, with losses rising to 4.74 billion rupees in the July-September quarter from a year earlier, amid rising spending. Its revenues increased by more than 60%, driven by strong growth in its financial, commercial and cloud services.
Multiple input for Paytm may seem steep, “we consider it sustainable anyway, because it is the most impactful and the most economical business on the Internet,” the note said.
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