Paytm Q1 Results Expected to Show Significant Revenue Drop Amidst RBI Impact

Stock Market Update: Paytm’s share price has dropped over 40% since the end of January following actions by the Reserve Bank of India on its payment bank. Analysts expect Paytm to report a significant decline in revenues for the quarter ending June 2024.

Yes Securities’ Predictions:

• Overall Revenue Drop: 32% decline in revenue from operations.
• Payment Services to Consumers: 40% decline.
• Payment Services to Merchants: 35% decline.
• Financial Services and Others: 30% decline.
• Payment Processing Charges (PPC): Expected to be 55.5% of payments, up from 46% in the previous quarter.
• Total Expenses (excluding PPC): Expected to rise by 7%.
• EBITDA Margin: Expected to decline by 5,050 basis points to 60.4%.

Motilal Oswal Financial Services’ Predictions:

• Revenue: Expected to decrease by 36% YoY to around ₹1,490 Crore.
• Contribution Profit: Expected to decline by 51% YoY to around ₹640 Crore.
• Gross Merchandise Value: Expected to decline by 7% YoY to ₹4.3 trillion.
• Contribution Margin: Pegged at 43%.
• Adjusted Operating Loss: Expected to be ₹490 Crore.
• Rating: Motilal Oswal maintains a Neutral rating on the stock.

StoxBox’s View:

• Current Trading Price: ₹434.
• Target Price: ₹449 with a stop loss of ₹398.
• Outlook: Positive due to a large, engaged customer base and potential EBITDA breakeven by FY25. Recent technical charts suggest a trend reversal, making it a compelling buy.

Key Focus: Motilal Oswal advises monitoring any further impact from RBI notifications on Paytm.

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