One97 Communications Stock Recommendations: Why Paytm Share Price Fell By 9% On Friday, January 24?

One97 Communications, the parent company of leading fintech Paytm, nosedived by nearly 9% on Friday, January 25, as its name appeared in one of the biggest cryptocurrency scams called HPZ Tokens. It is reported that Paytm along with other new-age digital companies such as RazorPay, PayU, and Easebuzz are among eight payment service providers, that are under the Enforcement Directorate (ED) radar. Paytm stock has witnessed sharp selloffs since its Q3 results announcement.

Paytm Share Price:

The stock price of Paytm traded at Rs 820 apiece, at the time of writing on BSE, down by 2.01%. Its market cap was around Rs 53,036.20 crore. The stock nosedived by as much as 8.9% to hit an intraday low of Rs 773.90 apiece.

The stock's 52-week high and low is at Rs 1,063.00 and Rs 310 apiece respectively.

YTD, the stock is down by 16%.

Why Paytm Shares Are Falling?

Razorpay, PayU, Easebuzz and Paytm are among eight payment gateways that have come under investigation with the Enforcement Directorate (ED) freezing around Rs 500 crore in their virtual accounts over the last two years in connection with 10 Chinese nationals running one of the biggest cryptocurrency scams, HPZ Tokens, from India, as per Times of India report.

It is reported that the culprit accused, deceived people across the 20 states, creating a fraud of Rs 2,200 crore and siphoning it out of the country.

Following the news, Redbox Global India has announced that the development would be 'Negative For Paytm'.

It needs to be noted that Paytm has not made any official announcement related to the matter, and GoodReturns.In could not confirm the same.

BUY/SELL Paytm Share Price?

Brokerages liked Paytm stock despite the weakness in profitability during Q3FY25. In Q3 of the current fiscal, Paytm posted a net loss of Rs 208 crore, which narrowed from a loss of Rs 220 crore in Q3FY24. Also, the net loss is better than Jefferies' estimates of Rs 315 crore net loss in Q3FY25.

Brokerage JM Financial said, "With headwinds behind, we forecast it to deliver c.23% revenue growth over FY25-30, with EBITDA margin of 20.7% in FY30, driven by higher take-rates in credit distribution as well as payments and tight control on most cost line-items. We value Paytm at 70X FY27E PER (in-line with trading multiples of our consumer internet coverage), resulting in Mar'26 TP of INR 1,250, 40% upside at CMP. We recommend 'BUY'."

JM's note added, "We reinitiate on One97 Communications Ltd. (Paytm) with a BUY rating and a Mar'26 TP of INR 1,250 (40% upside), valuing the business at FY27E PER of 70x, broadly in line with trading multiples of our consumer internet coverage. We expect the company to deliver 23% FY25-30E revenue CAGR while improving EBITDA margin to 20% by FY30. Furthermore, depreciation is expected to be on a flat/declining trend while other income would rise on higher cash balance through sale of Events ticketing business and PayPay stake in Japan. This would result in robust PAT conversion, resulting in c.16% PAT margin in FY30."

Among key risks are --- 1) any further scrutiny considering significant regulatory impact across businesses, 2) sustained slowdown in credit distribution or higher credit losses on DLG book, and 3) sudden changes in competitive landscape considering multiple wellfunded players in Indian Fintech ecosystem.