Shares of One 97 Communications, the parent company of Paytm, experienced a 4% increase, reaching Rs 797 on the BSE, following an announcement that the company's Gross Merchandise Volume (GMV) surged by 39% year-on-year (YoY) in July. Additionally, the average monthly transacting users grew by 19% YoY.
In an official exchange filing, Paytm revealed that the merchant payment volumes for July 2023 reached Rs 1.47 lakh crore ($17.9 billion), showcasing a substantial YoY growth of 39%. The loan distribution business exhibited remarkable growth, surging by 148% YoY, with a total of Rs 5,194 crore ($632 million) distributed during the month.
Furthermore, Paytm disbursed 43 lakh loans through its platform in July, signifying a remarkable 46% increase compared to the same period in the previous year. The average monthly transacting users for the month stood at 9.3 crores, reflecting a 19% YoY expansion of the customer base.
Paytm emphasized its commitment to maintaining credit quality in its loans distribution while navigating economic uncertainties. The company aims to deliberately calibrate its credit disbursement growth over the next few quarters to ensure the improved portfolio performance of its partner network. Paytm also disclosed plans to onboard 3-4 new partners in FY2024.
Despite the positive news, the stock exhibited some fluctuations. At 10:10 am, the stock was trading 2.2% higher at Rs 784 on the BSE. The year-to-date performance showed a 47% surge in the stock's value.
Analysts anticipate further growth for Paytm, with an average target price of Rs 1,036, indicating a potential upside of 32% from the current market prices. A consensus recommendation from 13 analysts suggests a BUY for the stock.
Technical indicators, such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), highlighted the stock's performance. With an RSI of 40.2, the stock is not considered oversold or overbought. The MACD at -5 indicated a strong bearish trend in the short term.
Paytm's positive performance in July's merchant payment volumes indicates the company's resilience and potential for growth despite ongoing market uncertainties.
