In this post we will do a Paytm share analysis in depth, all about like their fundamentals, future view, company’s outlook, their financials, shareholding patterns, share forcast etc. Based on company’s fundamentals and technical analysis, we will try to predict Paytm share price target 2023,2024,2025.
About Paytm
Paytm (One 97 Communications Ltd) is India’s leading digital ecosystem for consumers as well as merchants and has built the largest payments platform. It was Incorporated in 2000 by Mr Vijay Sekhar.
The company is in the business of offering payment services, financial services, and commerce and cloud services to their customers. The Co. introduced “Paytm Soundbox” which is currently available in 11 different languages.
Paytm IPO (Initial Public Offering)
During FY 2021-22, Company made an IPO at a price of ₹ 2,150/- per equity share aggregating to ₹ 183,000 millions, comprising a fresh issue of ₹ 83,000 million and an offer for sale of ₹ 100,000 millions.
Paytm Share Price Target 2023: Technical Analysis
Paytm Share Price Target 2023
| Year | Paytm Share Price in 2023 |
| 2023 | ₹550 to ₹580 |
Company Overview
| Company Name | One 97 Communications Ltd |
| Company Website | http://www.paytm.com/ |
| Chairman and Managing Director | Mr. Vijay Shekhar Sharma |
| Market Cap (Cr.) | ₹ 34,606 |
| 52 W High / Low | ₹ 994 / 438 |
| Stock P/E | – |
| Book Value | ₹ 204 |
| P/B (Price to Book Value) | 2.61 |
| Face Value | ₹ 1.00 |
| ROCE | -20.9 % |
| ROE | -22.0 % |
| Dividend Yield | 0.00 % |
Business Overview:
- Payment Service: Under this segment, consumers can use a wide selection of instruments, both third party like cards, net banking and Paytm Payment Instruments like Wallet, Paytm Postpaid (BNPL) to make online payments for Mobile Recharge, Utility Bills, Rent, Education, Wallet top-ups and money transfers using the Paytm app. Consumers can also make online payments on third party apps and in-store payments through QR codes and devices.
On the merchant side they provide solutions that allow them to accept payments through a wide variety of instruments and. To merchants they offers certain products and services such as Paytm Soundbox and POS.
Company charging Payment processing fee and rentals for devices deployed for the merchants and convenience fee with the customers only in a few cases.
- Commerce and Cloud Services: In this segment, the company’s services include Travel and Entertainment Ticketing, Mini App Store, Games and PayTm First subscription, Paytm Mall, and E-commerce. They also provide software and cloud services to enterprises, telecom companies, and digital and fintech platforms to track and enhance customer engagement, build payment systems, and unlock customer insights.
The company charges a Convenience fee from its customers and Payment Processing fee, marketing and Advertising fee from its Merchants
- Financial Services : In this segment, the Company offers services like mobile banking, lending, insurance, and wealth management for consumers and merchants.
Company charges Payment Gateway and convenience fee for Digital Banking, Sourcing and Collection fee from NBFC/Banks for the Lending services, Brokerages, and fees to its customers using its Trading Platform and Brokerage from Insurance companies for the Insurance service.
Key Highlights:
- As of March 31, 2021, the company has a 333 million+ client base and 21 million+ registered merchants
- Their GMV for FY22 stood at ₹8.5 Lakh Cr, as compared to ₹4.0 Lakh Cr in FY21.
- Paytm has a share of 13% in overall UPI payments.
- But it’s the peer-to-merchant segment (P2M) where it’s truly dominant with a 50% share.
Revenue Mix FY22
- Payments & Financial Services contribute 78% of their overall revenue.
- Commerce & Cloud Services contribute 22% of their overall revenue.
Paytm Financial Review (Important Points for Investors)
- Company sales are increasingly but their expenses are higher than their revenue therefore company continuously making losses.
- To compete with their competitor, company regularly expending to increase their presence.
- Based on March 2022, company’s revenue was INR 3,892 crore, whereas their expense was INR 6,188 crore, therefore company booked a loss of INR 2,296 crore.
- On balance sheet you can check they have good reserve and increasing that is because they have some marquee investors , and company is generating funds from their investors.
- On March 2022, Company’s total reserves was INR 13,648 crore, and company using their reserves to expanding their businesses.
- Company’s maximum equity portion is to their Investors, As on March 31, 2022, the aggregate foreign shareholding in the Company was approx. 75.91%
- As on Dec 2022, DIIS holds total of 1.87% stake in the company.
- Therefore Company’s founder Vijay Sekhar have only 8.89% stake in paytm (As on march 2022).
- However paytm have reduced their debt and have low debt, As on march 2022 company have only INR 204 crore of debt.
- As on March 2022, company total fixed asset value was around INR 830 crore.
- The positive thing is company have a good investment of INR 3,293 crore.
- If you will analyze company’s quarterly results, then you will find that from last 4 quarters company reduced their losses, that are a good thing.
- However, company’s management said from sep 2023, Paytm would be a profitable company.
- The Co. continues to focus on further expanding its payments network by acquiring quality customers and merchants with high activity rate and transaction frequency.
- Paytm not generating profits therefore there return on equity (ROE) and Return on Capital Employeed (ROCE) is in negative.
- Similarly due to regular losses you will not get their Price to earnings (PE) ratio.
- Paytm share price is trading around ¼ of their IPO price which was ₹ 2,150/ (As on Jan 2023).
Pros:
- Company has reduced debt, almost debt free.
Cons:
- Stock is trading at 2.61 times its book value
- Company has low interest coverage ratio.
- Company has a low return on equity of -24.9% over last 3 years.
- Company’s cost of borrowing seems high
Paytm Share Price Target 2024-2025
Paytm Share Price Target 2024
| Year | Paytm Share Price in 2024 |
| 2024 | ₹620 to ₹660 |
Paytm Share Price Target 2025
| Year | Paytm Share Price in 2025 |
| 2025 | ₹700 to ₹740 |
Paytm SUBSIDIARY/ASSOCIATE COMPANIES:
(As on March 2022)
No new company became the subsidiary, joint venture or associate of the Company except Admirable Software Limited which was incorporated on August 17, 2021, as a wholly owned subsidiary of Paytm Financial Services Limited (Associate Company of Paytm).
Paytm Shareholding Patterns:
| Holdings | Year 2022(Dec)% |
| FIIS | 72.80 |
| DIIS | 1.87 |
| Public | 25.32 |
Paytm Share Price Target 2030:
It would be very early to estimate very long term future prediction, especially when a company is not generating profit and continuously making losses, however, paytm management have said from Sep 2023 they will be a profitable company. Therefore we can only create an optimistic value. When the company will start to generate profit and we will find things are improving then we could predict the futuristic price based on their performance.
Conclusion:
Overall Paytm have a strong customer base, but company is not generating profit. If you have already invested at IPO time and still in the company then at this level according to your risk appetite, you can hold. For a new Investor it is not a good idea to invest until company started to generate profit, there are lots of other companies to invest, which is generating profit and value to their investors.
Here is the end of the post Paytm share price target 2023, 2024, 2025-2030, hope you got some value, please post your valuable comments below in comment section.
Source: Paytm Annual Report and Internet
Disclaimer: On this page all the mentioned entries are based on the date the post was written, these could be change in future.
Nirmal is a NISM Certified Derivative Trader & the Founder of InvestandEarn.net (Financial Blog). He entered the world of Equity research to explore his interests in financial markets having 5+ Years of Experience in Share Market Trading & Investing. Nirmal frequently writes about Share Market Trading & Investment and publishes his personal view on the market. Drop him a mail at nirmal.jaysval@investandearn.net.
