Paytm Shares Rise As Company Sees 492% YoY Jump in Loan Disbursal; Should you Invest?

Paytm Shares Today: Paytm or One97 Communications limited share price was up by nearly 3 per cent in early trade as the company said that the platform’s lending and disbursements business has achieved a milestone Rs 24,000 crore annualised run rate in June quarter. The company also reached its highest number of monthly transacting users (MTU) — 76 million on its super app — during the month, in a BSE filing on July 11.

It registered 492 per cent growth in loan disbursal Year-on Year (YoY) and the value of loan disbursal surged by 779 per cent y-o-y. “Our lending business (in partnership with top lenders) continues to witness accelerated growth with disbursements through our platform now an annualised run rate of over Rs 24,000 crore in June. The number of loans disbursed through our platform grew 492 per cent y-o-y to 8.5 million loans in the quarter ending June 2022, while the value of loans disbursed grew 779 per cent y-o-y to Rs 5,554 Cr ($703 million),” Paytm said in its business update.

“Rapid growth of our lending products brings us an attractive profit pool. We are also seeing increases in average ticket size due to the scale-up of the personal loans business in particular,” Paytm said in the release.

In terms of merchant payment volumes for June quarter, Paytm registered a 101 per cent increase YoY at Rs 2.96 lakh crore.

On offline payments, the company said they strengthened leadership position with approximately 3.8 million devices employed in total. “The strong adoption of devices also has a correlation with the rise in merchants eligible for loans from our platform,” the company noted.

Shares of Paytm jumped 2.83 per cent to Rs 718.95 per share in Monday’s intraday trade on the BSE. On Monday’s opening price, the counter is trading at nearly 64 per cent discount from its 52-week high value of Rs 1961, which the scrip touched on November 18 last year.

Should you Invest in Paytm Stocks?

Manoj Dalmia, founder and director-Proficient Equities Limited, said: “Paytm loan disbursements jumped 471 percent on year in April-May to 5.5 million, about Rs 3,576 crore in the first two months of this quarter, representing a growth of 829 perccent over last year,the stock has recovered more than 30 per cent after hitting its 52-week low of Rs 510.1 recently. Investors can hold the stock or add some as stock has approached a key price are from where it can start its upward move with a Target of Rs 800, Stop Loss-Rs 677 and entry at current levels.”

JP Morgan had last month reinstated an overweight rating on One 97 Communications with a March 2023 price target of Rs 1,000.

Citi Research had last month resumed coverage of One 97 Communications with a Buy Rating and target price of Rs 915. It said Paytm is showing a steady improvement in payments monetisation and is scaling up financial services rapidly.

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