Paytm quarterly loss narrows; should you buy, sell or hold One97 stock now?

Paytm parent One97 Communications’ shares gained on Saturday, as the market opened for a full trading day, after the digital payments company reported its financial results for the October-December period.  At day's high, the stock gained over 3 per cent to Rs 797.7 per share on the BSE, while it last traded at Rs 784.9, up 1.42 per cent.

After market hours on Friday, Paytm reported a net loss of Rs Rs 221.7 for the quarter ended December 2023, as against a net loss of Rs 392.1 crore for the corresponding period a year ago. 

Its revenue, however, came in at Rs 2,850.5 crore for the quarter under review, up 38 per cent on a year-on-year basis. 

How do brokerages view the stock? 

CLSA upgraded the stock to 'buy' from 'outperform' after the digital payments company's earnings announcement, with a revised target price of Rs 960 for the stock instead of Rs 925 earlier.

The brokerage is of the view that Paytm is attempting to diversify and looking for alternative revenue streams, with the addition of two partners. 

Given the scale-back in its BNPL (buy now pay later) business, the company is diversifying more within the lending segment and otherwise, according to CLSA.

The company may try to offset the bulk of the BNPL loss by doing a little bit in various things such as new revenue streams and cost reduction, according to the brokerage, which increased its core EBITDA estimates for the digital payments company by three per cent.

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