Paytm Ltd: Looks good:

You can take a look at the shares of Paytm Ltd (One 97 Communications) which is looking attractive at the CMP of Rs.357.90.

You can initiate a buy at the CMP for, T: Rs.427/Rs.478, SL: Rs.317. The company is expected to cut down its employee cost substantially.

The parent company of the fintech giant Paytm (One97 Communications), is reportedly considering trimming employee costs -- cutting around 15-20% of its workforce in the current fiscal year.

Paytm has initiated an employee cost-saving plan of Rs.400-500 Cr, potentially resulting in a workforce reduction ranging from 5,000 to 6,300, according to a Financial Express report.

The company has forecast Q1 revenue at ₹1,500-1,600 crore and is confident of "seeing meaningful improvement starting from Q2FY 2025" from restarting certain paused products and achieving steady growth in operating metrics.

Like ZEEL, Paytm is also in the midst of a restructuring and has seen several top-level exits and layoffs in recent months.

The company's loss narrowed to Rs.1,422.4 crore for the year ended March 31, 2024. The company had recorded a loss of Rs.1,776.5 crore in FY23.

The annual revenue of Paytm increased by about 25% to Rs.9,978 crore for FY24 from Rs 7,990.3 crore in FY23.

In March, 2024, YES Securities gave a 'buy' rating with a target price of Rs.505, which was later reduced to Rs.450.

Jefferies has upgraded Paytm to hold from an underperform. However, the brokerage has trimmed the target to Rs.400 apiece from Rs.500 apiece earlier. It is to be noted the stock was not rated by Jefferies since the RBI issues started.

Meanwhile, Morgan Stanley has maintained an equal-weight rating on the stock with a target of Rs 555 apiece.

The weekly chart of the company is looking slightly BULLISH.

Additional Inputs from: ET Now:

Jefferies and Goldman Sachs have emphasised Paytm's robust cash balance of Rs.8650 Cr, as of March, 2024, which could act as a cushion against short term financial fluctuations and ensure stability.

Jefferies predicts a rapid recovery in Paytm's payments and commerce revenues driven by  increased marketing spend and gradual scale up of lending with positive cash flow from H2FY26.

Paytm saw a robust 58% increase in merchant subscription for device payments, growing from 68 lakhs in March, 2023 to 1.07 crore in March, 2024.

Dolat Capital has maintained a BUY rating in Paytm, citing company's renewed focus on business growth and cost efficiency; as positive indicators of revival.

Goldman Sachs noted that Paytm's GMV and disbursals outperformed expectations predicting a positive trajectory with adjusted EBIDTA breakeven by the end of FY25 and net income profitability by FY27.

Paytm achieved a 48% year on year growth in loan distribution business reaching Rs.52, 390 crore in FY24.

The company is also intensifying its efforts at expanding the insurance distribution portfolio, developed by PIBPL.