Paytm's Stock Surge 📈: From Dirt to Double!

Hey there,

Remember when PayTM's stock was in the news last year? And not for the right reasons; heavy losses, stock price at an all-time low, inflated valuation, and much more.

Well, it's now almost DOUBLED. Curious about the secret behind this turnaround?

Let's go back to 2021. Paytm made its debut on the stock market and faced a 27% drop on day 1. Investors were questioning its inflated valuation and future projections.

The plot thickened as the stock price plummeted, hitting a low of Rs. 439.

But fast forward to today, and the scene has dramatically shifted. Paytm's stock has gone up more than 2x from its lowest and has shown an 80% increase this year. The market's perception of new-age tech stocks has taken a positive turn.

Here’s what changed for PayTM:

1. Lending Business Growth: Paytm's lending business is performing really well, enhancing the brand's overall reputation. In August alone, they disbursed a whopping 43 Lakh loans, totaling INR 5,194 Cr.

2. Subsidiaries in the Green: Paytm Money, their stockbroking business, turned profitable this year. It transitioned from a net loss of INR 10.7 Cr in FY22 to a profit of 42.8 Cr in FY23, thanks to a 140% YOY growth in brokerage income.

3. Market Mood Swings: The profitability news of similar listed stocks like Zomato has helped other new-age tech stocks, with Paytm reaping the benefits.

4. Financial Strength: CFO Madhur Deora announced that Paytm is financially strong. With over Rs 8,300 crore in reserves and no debt, they're on solid ground.

5. Innovations leading the way: The 'Card Soundbox' launch shows Paytm's innovations. This tool, merging QR and card payments, is a game-changer for merchant payment solutions.

While Paytm's primary business and its subsidiaries are performing well, it's important to zoom out and see the bigger picture. The market is bullish, and most solid businesses are doing well.

The future of Paytm's stock trajectory depends on its innovation pace, cash management, and ability to keep reducing losses. Will they continue to win the trust and wallets of investors? Time will tell.

Jargon of the day ✏️

Stock Surge - A rapid increase in the price of a stock due to positive news or market trends.

Hope you enjoyed today's edition. Don't hesitate to share your thoughts with us.

Cheers,
Hrishikesh