Shares of digital financial services firm One97 Commuications, which operates under the Paytm brand, climbed 4 per cent to Rs 697.5 apiece on the BSE in Friday’s intra-day trade, ahead of the company’s March quarter result for FY23 (Q4FY23). The stock has demonstrated significant growth, gaining upward momentum after hitting a lifetime low of Rs 438.35 on the NSE in November 2022. On a year-to-date (YTD) basis, the stock has surged nearly 30 per cent.
The fintech major is scheduled to report its fourth quarter earnings on Saturday, May 6. “We wish to inform you that the company will hold its earnings conference call for shareholders, investors and analysts on Saturday, May 6, 2023 from 11:00 am to 12:00 pm, to discuss the financial results of the company for the quarter and year ended March 31, 2023,” Paytm said in a filing.
Goldman Sachs expects Paytm to report revenue growth of 49 per cent on a year-on-year basis, while adjusted Ebitda margin at 10 per cent.
It expects Paytm to report robust March quarter results, with revenue growth of 49 percent year-on-year (YoY). This would be the second consecutive quarter of positive margin, on reported basis, the brokerage said in a note.
Goldman Sachs is expecting 10 percent adjusted EBIDTA margin for Paytm in the March quarter or 3 percent margin, excluding Rs 170 crore of estimated UPI incentives. This is against a minus 24 per cent margin in the same quarter a year ago.
Yes Securities expects Paytm to post good earnings performance in the March quarter of FY 22-23. The domestic brokerage has maintained a ‘Neutral’ rating on the fintech pioneer with a target price of Rs 700 per share.
Paytm is likely to post healthy sequential growth in revenue on the back of steady loan disbursement and new device addition, Yes Securities said in a research note.
What Should Investors Do?
Anuj Gupta, Vice President, Research, at IIFL Securities, expects Paytm to report good numbers due to a steady loan disbursement and new device addition. “The stock recovered from its low of Rs 441 levels to Rs 666 levels. (The) trend is looking like reversing and (we are) expecting a further upside. It may test Rs 700 to Rs 720 levels very soon,” said Gupta, adding that strong support is seen at Rs 590 levels.
Citi expects net payment margins at 15.7 basis points (bps), up 240bps QoQ. “We estimate contribution margins at 52.8 per cent and adjusted EBITDA and EBIT margins at 4 per cent and -3 per cent, respectively.
Citi pegs Paytm’s revenue at Rs 2,274 crore, up 48 per cent YoY and 10 per cent QoQ, while it’s GMV is seen at Rs 362crore, up 40 per cent YoY and 5 per cent QoQ. The fintech major is likely to report and adjusted EBITDA at Rs 86.6 crore in Q4FY23 against a loss of Rs 367.6 crore in Q4FY23 but a rise of 177 per cent QoQ. Its EBITDA margins are seen at 4 per cent, 230 bps on QoQ basis.
The global brokerage firm also estimates a strong growth in digital payments to continue, driven by UPI and credit cards, while its market share is steady for the quarter. It also expects upgrades as the financial services segment is likely to report a robust growth momentum, pushing the topline higher.
During FY23, Paytm reported a 4.6x jump in the value of loans disbursed to reach an annualized run-rate of Rs 50,000 crore. We estimate disbursements to report a steady 64 per cent CAGR over FY23-25, thus driving the mix of financial revenue upwards to 31 per cent, said Motilal Oswal in its initiating coverage report on the stock.
Paytm has achieved breakeven in adjusted EBITDA during 3QFY23, well ahead of its guidance. We estimate contribution margin to improve to 56.8 per cent by FY25 from 30 per cent in FY22, fueled by improvement in operating leverage and rise in financial business mix, it said with a buy rating and a target price of Rs 865 on the stock.
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