Brokerage firm Macquarie raised its loss projections for Paytm by 16-27 percent for FY22-25 on lower revenue and higher employee as well as software costs.
THe share price for Paytm parent One97 Communications went down, after Macquarie lowered its target price for the stock from INR 1200 to INR 900.
Ratings for Paytm
The brokerage retained its ‘underperform’ rating on lower revenue and higher employee and software costs.
The Paytm stock fell as much as three percent to an all-time low of Rs 1,181.1 on the BSE.
Paytm’s IPO was the biggest of all time in India. It’s debut was generally regarded as ‘below par.’
Macquarie also revised its revenue CAGR estimate from 26 percent to 21 percent. Paytm’s price-to-sales multiple has also been lowered from 13.5 times to 11.5 times.
RBI Regulations
RBI’s proposed digital payments regulations could also not augut well for Paytm.
The RBI could cap wallet charges and affect players such as Paytm. Paytm’s lion share of the revenue pie comes from its payments business. About 70 percent of overall gross revenues for Paytm, any regulations capping charges could impact revenues significantly.
Insurance regulator IRDA also rejected Paytm’s move into the insurance sector. Regulatory risks also abound when it comes to Paytm getting a banking license.
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