Paytm’s stock dropped more than 3% to an all-time low of Rs 728.50. On the BSE, the company’s market capitalization fell below Rs 50,000 crore.
The stock is currently trading 63% lower than its all-time high of Rs 1,961.05. It opened 0.7% lower at Rs 748.20, compared to the previous close of Rs 753.60 on the BSE. The stock has been on a downward trend and has dropped more than 45% year to date. The stock is trading below its five-day, twenty-day, fifty-day, hundred-day, and two-hundred-day moving averages.
Ashis Sarangi, a SEBI registered investment advisor at Pickright Technologies, commented on the recent sell-off, saying, “The fundamental reason for the sharp drop in share prices is that the majority of new age companies that are listed on the market are due to huge losses.”
“These companies want to make money in the long run, not in the short term. We also believe that investors must devote time to understanding the business models of new-age enterprises. Take a look at stocks like Twitter and LinkedIn, which both corrected after being listed in the United States and finished below their initial listing price “He stated.
“Paytm is valued at around 9.5x operating revenue based on our target price of Rs 1,352 per share, which is a slight premium to global fintech with a comprehensive offering, in line with BNPL players, and a discount to global card network entities. It should also be noted that Paytm revenue is expected to grow at a CAGR of more than 35% from FY22 to FY24E and more than 25% from FY24 to FY26E, which is significantly higher than the industry average. Our valuations correspond to a price/revenue growth ratio of 0.3x “According to the brokerage firm.
Macquarie, which began coverage of the company in November last year with a target price of Rs 1,200, has reduced its target to Rs 700, citing profitability concerns.
