Paytm shares fly 11% as NPCI allows co to onboard new UPI customers

Paytm share price: Shares of payment aggregator Paytm, which is owned and operated by One 97 Communications, rallied as much as 11.01 per cent to hit an intraday high of Rs 763 per share on Wednesday, October 23, 2024.

 

The surge in Paytm share price came after the company announced that National Payments Corporation of India (NPCI) has granted approval to the company to onboard new UPI users, with adherence to all NPCI procedural guidelines and circulars. 

 

 

Paytm, via an exchange filing said, “We would like to inform you that vide letter dated October 22, 2024, the National Payments Corporation of India (NPCI) has granted approval to the Company to onboard new UPI users, with adherence to all NPCI procedural guidelines and circulars.”

 

 

Earlier this year, the Reserve Bank of India (RBI) imposed restrictions on Paytm Payments Bank Ltd (PPBL) for onboarding new UPI users on Paytm app.

 

“Paytm has finally received NPCI approval for adding new UPI users which paves the way for re-accelerating its dwindling user base and further signalling an easing of regulatory stance. We believe Paytm’s cost optimisation measures and gradual business turnaround will put it on an early path to profitability (Ebitda/PAT positive by FY26E/27E). Thus we retain ‘Add’ with discounted cash flow (DCF)-based unchanged target price (TP) of Rs 750,” analysts at domestic brokerage Emkay said.

 

Paytm Q2 results

 

Paytm’s consolidated net profit came in at Rs 930 crore in the September quarter of financial year 2025 (Q2FY25), from a  net profit of Rs 290 crore in the same quarter of the previous year (Q2FY24).

 

The company’s net profit was primarily boosted by a one-time gain of Rs 1,345 crore from the sale of its movie ticketing business to Zomato.

 

Revenue from operations, meanwhile, for Q2FY25 fell 34 per cent annually to Rs 1,659 crore, as against Rs 2,518 crore.

 

The fintech firm’s Q2FY25 Gross Merchandise Value (GMV) rose 5 per cent Q-o-Q. The management, however, predicts further acceleration in GMV growth this quarter, influenced by the festive season.

 

During the quarter, Paytm completed the transaction to sell its entertainment ticketing business to Zomato Limited. The final price, after working capital adjustments, was Rs 2,014 crore, leading to gains of Rs 1,345 crore. The transaction has resulted in further strengthening of the company’s balance sheet with a cash balance of Rs 9,999 crore. 

 

“The sale of its entertainment business would provide a financial boost, as this transaction will generate significant profits for Paytm, allowing it to reinvest in other high-potential areas. Cash proceeds will further strengthen the balance sheet. We estimate Paytm’s Ebitda to turn positive by FY27. We maintain our ‘Neutral’ rating with a TP of Rs 550,” analysts at Motilal Oswal said.

 

According to reports, UBS has maintained a ‘Neutral’ rating with a target price of Rs 490 while Bernstein has an 'Outperform’ rating with a target price of Rs 600. On the other hand, Jefferies maintained its ‘Buy’ rating with a target price of Rs 700.

 

The market capitalisation of Paytm is Rs 47,261.48 crore, according to BSE. The company falls under the BSE 200 category. 

 

Paytm shares’ 52-week high is Rs 952.60 while its 52-week low is Rs 310 apiece.

 

At 11:53 AM, Paytm shares were trading 10.42 per cent higher at Rs 758.90 per share. In comparison, BSE Sensex was trading 0.47 per cent higher at 80,595.79 levels.