Shares of digital financial services firm One97 Commuications, which operates under the Paytm brand, climbed 2.65 percent to Rs 688.65 apiece in Friday's morning trade. The stock has demonstrated significant growth, gaining upward momentum after hitting a lifetime low of Rs 438.35 on the NSE in November 2022. On a year-to-date (YTD) basis, the stock has surged nearly 30 percent.

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The fintech major is scheduled to report its fourth quarter earnings on Saturday, May 6. "We wish to inform you that the company will hold its earnings conference call for shareholders, investors and analysts on Saturday, May 6, 2023 from 11:00 am to 12:00 pm, to discuss the financial results of the company for the quarter and year ended March 31, 2023," Paytm said in a filing.

Global brokerage Goldman Sachs expects Paytm to report robust March quarter results, with revenue growth of 49 percent year-on-year (YoY). This would be the second consecutive quarter of positive margin, on reported basis, the brokerage said in a note.

Goldman Sachs is expecting 10 percent adjusted EBIDTA margin for Paytm in the March quarter or 3 percent margin, excluding Rs 170 crore of estimated UPI incentives. This is against a minus 24 percent margin in the same quarter a year ago.

Yes Securities expects Paytm to post good earnings performance in the March quarter of FY 22-23. The domestic brokerage has maintained a 'Neutral' rating on the fintech pioneer with a target price of Rs 700 per share.

Paytm is likely to post healthy sequential growth in revenue on the back of steady loan disbursement and new device addition, Yes Securities said in a research note.

How to trade the stock?

Anuj Gupta, Vice President, Research, at IIFL Securities, expects Paytm to report good numbers due to a steady loan disbursement and new device addition. "The stock recovered from its low of Rs 441 levels to Rs 666 levels. (The) trend is looking like reversing and (we are) expecting a further upside. It may test Rs 700 to Rs 720 levels very soon," said Gupta, adding that strong support is seen at Rs 590 levels.

"Paytm's share price has been on a downward trend since its IPO listing on November 18, 2021. The stock has formed a bearish trend with lower highs and lower lows over the past several months and is trading below its 50-day moving average, indicating a short-term bearish trend. The RSI is currently at 61, it indicates neither overbought nor oversold condition and a possible rebound, while the MACD is showing a bearish signal with the MACD line below the signal line," said CA Manish Mishra, Virtual CFO.

All about risk

Mishra said investors should be aware of the risks associated with the company's business and conduct their own research and analysis before making any investment decisions.

"I think if you are a risk-taking investor who wants to wait for say, another one-and-a-half to three years, and it trades at somewhere around four or five times market cap to sales, you could have a 20-25 percent upside from here. But if you're a conservative investor, I don't think it makes sense to stay in a company that will continue to report losses. So I think if you are a risk-prone investor who's willing to take that risk, stay in the counter. But if you are a risk-averse investor, I think there are a lot of better options available," said Sharad Avasthi, Head, PCG Research, SMIFS.

The leading payments and financial services company has recently announced a significant achievement in offline payments through a recent exchange filing. Earlier, the firm said it has successfully deployed 680 lakh Paytm payment devices, such as Soundbox and PoS, which marks a notable milestone.

In February, the digital financial services firm had completed buyback of shares worth Rs 849.83 crore at an average price of Rs 545.93 per share.

(Edited by : Shoma Bhattacharjee)

First Published:May 5, 2023 10:00 AM IST