Paytm share price gains for fifth straight session, crosses ₹1,000 for the first time in six months

Mint

16-07-2025

Paytm share price in focus today: Shares of One 97 Communications, the parent company of Paytm, jumped nearly 3% in intraday trade on Wednesday, July 16, hitting the day's high of ₹ 1,014, crossing the ₹ 1,000 level for the first time in six months.
Today's rally also marked the fifth consecutive session of gains for the stock, taking its total rise to 9% so far in July. The stock was last seen around the ₹ 1,000 range in early January, but failed to sustain those levels and underwent a correction that lasted for two months before regaining momentum in early March, with the stock ending the following four months in green.
The recent rally in Paytm shares has been fueled by reports of its possible inclusion in the MSCI Standard Index. According to brokerage firm Motilal Oswal, there is a high probability that Paytm may be upgraded from the MSCI Smallcap Index to the Standard Index in the upcoming MSCI rebalancing in August.
If that happens, Motilal Oswal estimates the stock could see inflows worth $212 million following the index adjustments. The MSCI announcement is expected on August 8, with changes taking effect from August 26.
After hitting an all-time low of ₹ 310 in May 2024, Paytm has staged a strong recovery, rallying 230% to end the year at ₹ 1,017, emerging as one of the best turnaround stocks of the year.
This sharp rebound is largely attributed to the company's improving performance across multiple business segments, which has revived investor sentiment and boosted confidence in its long-term growth trajectory.
Mutual funds have also shown growing confidence in the company's growth prospects. According to the latest shareholding data for Q1FY26, domestic mutual funds collectively held a 13.86% stake in Paytm, up from 13.11% in the March quarter.
Among the notable domestic investors are Mirae Asset Mutual Fund, Motilal Oswal Mutual Fund, Nippon Mutual Fund, and Bandhan Mutual Fund.
While mutual funds expanded their stake in the company, both FIIs and retail investors trimmed their holdings. FII ownership declined to 54.9% from 55.4% in the March quarter, while retail investors reduced their stake by 1.3% QoQ to 29.3%.
Paytm is scheduled to announce its June quarter results on July 22 (Tuesday), and analysts expect a strong performance, possibly marking the company's first profitable quarter on a PAT basis.
According to JM Financial, Payment Services revenue (excluding UPI incentives) is expected to grow 6% QoQ and 21% YoY, driven by a 27% YoY GMV increase. However, a rising share of lower-yielding UPI transactions may result in a lower take rate.
The merchant subscriber base is projected to grow by approximately 7% QoQ (22% YoY) to reach 13.3 million, reflecting the company's focus on onboarding new merchants and reactivating dormant ones.
Loan disbursals in Q1 are expected to grow by 8% QoQ (23% YoY), primarily led by merchant loans with a significantly lower mix of Default Loss Guarantee (DLG). However, personal loan disbursements may remain sluggish due to tighter norms around unsecured lending.
Despite the impact of wage hikes, improved operating leverage is expected to lead to an adjusted EBITDA of ₹ 211 million. Most notably, JM Financial projects that Paytm may turn PAT positive, reporting a net profit of ₹ 189 million, aided by treasury income, which is likely to offset ESOP and depreciation/amortization expenses.