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Paytm share price falls sharply post Q2 results, then recover. Key stock levels to watch

29 Nov , 2021   By : Kanchan Joshi

Paytm share price falls sharply post Q2 results, then recover. Key stock levels to watch

Shares of One 97 Communications Ltd, the parent of Paytm, fell as much as 4.6% today in early trade after the fintech company's net loss for second quarter widened due to a rise in expenses. That comes after shares ended last week 17 percent below the company’s IPO price of Rs2,150. However, at 9:50 am, Paytm shares pared losses to trade flat at Rs1,780 in line with a recovery in broader markets. 

In its first earnings report since going public earlier this month, Paytm said expenses jumped 37.1% to Rs1,599 crore as its consolidated net loss increased to Rs474 crore, from Rs437 crore a year ago. However, its revenue from operations, however, surged 63.6% to Rs1,086 crore for the quarter ended September.

“Losses is widening for Paytm however it witnessed decent growth on the revenue front. The market is waiting for clarity about the timing of its profitability therefore the volatility may continue however the price behavior is indicating that some funds are accumulating this stock but I will watch out for the high 1955, made on listing day where if it manages to take out this level then we can expect the positive momentum to pick up towards 2100 level. On the downside, the 1700-1650 area is acting as an immediate demand zone; below this, it is vulnerable to further weakness," said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Chief Executive Officer Vijay Shekhar Sharma highlighted the company’s ramp-up in the key segment of lending -- an important and fast-growing market where digital fintechs such as Paytm are serving millions of consumers and merchants.

Revenue from payments and financial services grew 69% to Rs842.6 crore while commerce and cloud services revenue grew by 47% to Rs243.8 crore.

“We are fully committed to head down and execute and deliver great results quarter-on-quarter, year-on-year forward on that," Sharma said in his opening comments.

"Some of the line items in our payment business are not just profit generating but free cash flow generating," Founder and Chief Executive Vijay Shekhar Sharma said in an earnings call for investors on Saturday.

Paytm raised Rs18,300 crore this month in India's biggest initial public offering, but made a dismal debut on the stock exchanges. The country's biggest IPO was subscribed 1.89 times with institutional buyers including FIIs flooding the share sale with offers seeking 2.79 times the number of shares reserved for them.


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