Shares of Paytm plunge Monday after brokerage Macquarie cuts target price
Shares of One97 Communications, the parent company of online payments platform Paytm, plunged on Monday and ended at Rs 1,159, down 5.89% or Rs 72.60 from the previous close of Rs. Rs 1,230, as brokerage firm Macquarie in its report on the company, sets the target price for its shares at Rs 900.
The company also gives the company and rating “UnderPerformance”.
Posting various business updates and results, we believe our revenue forecast, especially in distribution, is at risk and we therefore reduce revenue CAGR from 26% down 23% for fiscal year 21-26E,” said Macquarie analyst Suresh Ganapathy and Param Subramanian.
“We nearly cut our revenue estimates for fiscal year 21-26E by an average of 10% per year as lower cloud and commerce/delivery revenue was partially offset by higher payments revenue. We cut earnings (increasing loss forecast) by 16-27 percent for FY22-25E due to lower revenue and higher software and staff costs,” they added.
Macquarie plummeted its target price by nearly 25% due to a lower target multiple of 11.5x (Price-to-Sales Ratio) (from 13.5x previously) and lower sales. “We maintain UnderPerformance status with a revised target price of Rs 900.
