Why Paytm Smashes 19-Month High Today? Explained

The parent company of the payments platform Paytm, One 97 Communications Ltd., had its shares open higher at Rs 925.05 compared to the previous close of Rs 905.60, which promptly rose 2.80% to reach a 52-week high of Rs 931 on the BSE. The spike also caused Paytm to surpass its Rs 916.85 on Jan 31, 2022 peak level by 19 months. Shares of Paytm surged after foreign brokerage company Bernstein gave the stock an outperform rating and set a price target of Rs 1,100, representing a potential gain of 22% from current levels.

The fact that Foreign Portfolio Investors (FPI) upped their stake in Paytm in June Q1FY24 could represent another factor in the share price rally. According to data, FPIs raised their stake in One97 Communications from 5.45 percent in June 2022 to 16.86 percent at the end of June 2023. According to the company's annual report for 2022-2023, it is also adopting artificial intelligence (AI) into its business portfolio.

"As Mid & small cap indices scale a new peak every week on relentless buying coupled with positive news like adoption of AI in its business, stocks like Paytm are also seeing strong buying with next resistance at 932 on the Daily charts. Investors should book profits at current levels as a Daily close below support of 863 could lead to a fall in price to a target of 720 as well in the near term," AR Ramachandran from Tips2trades said.

Recently Paytm informed SEBI about its 23rd AGM and if you can recall Mr. Vijay Shekhar had shown his confidence that by September 2023, Paytm will be closer to breaking even. Overall company financials are improving, its revenue share increased and operational costs are reducing. Digital payment methods are gearing up. It is worth noting here that the card payment percentage has stopped. Dropped significantly and 8ts direct benefits for UPI and phone number-based payment platforms, Paytm in one of them. Today Paytm is trading at 920 and we had recommended buying at 620. It's a good return we have received since there, said V.L.A. Ambala (SEBI Registered Research Analyst), Stock Market Today (SMT).

Paytm Share Price Target

Commenting on the valuation of Paytm, Deven Mehata, Equity Research Analyst at Choice Broking said " The stock's current situation suggests a potentially favourable outlook. The stock has broken out of a recent trading range, indicating a shift in sentiment and potential upward momentum. It's also trading above significant moving averages, such as the 20-day 50-day and 200-day moving averages, implying a positive trend. The bounce off the 20-day Exponential Moving Average (EMA) at 851 highlights a support level for the stock."

"The stock's price movement follows a Rising Channel pattern, marked by ascending trendlines. This pattern signifies consistent buying interest as indicated by higher highs and higher lows. The Relative Strength Index (RSI) nearing 65 indicates strength in the current trend. The stock is projected for a target price of 1000, derived from the upper resistance of the Rising Channel," said Deven Mehata.

"Paytm was one of the worst performing large cap stocks with a strong correction seen from 1900 to 500 levels. The stock was seen halting its fall around 500 with increased volumes during its consolidation phase suggesting the possibility of accumulation. The stock then witnessed a falling channel breakout on the weekly charts along with confirmation of trend reversal thereby pushing the stock above 800 levels. The stock has recently witnessed a fresh breakout and confirmed uptrend continuation. The stock has also witnessed a bullish abc breakout follow-through on point and figure charts which can push the stock towards 1150 levels. investors are advised to hold the stock for 1150-1200 levels with stoploss placed at 800 levels," said Gaurav Bissa, VP, InCred Equities.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.