Latest news with #DolatCapital
India Today
6 days ago
- Business
- India Today
From aspiration to achievement: Paytm's operational discipline powers profitability
India's leading full-stack merchant payments platform, Paytm, has received a significant vote of confidence from Dolat Capital, which has raised the stock's target price to Rs 1,400, up from Rs 1,200, while maintaining a strong 'Buy' new stock pricing implies that the Noida-based firm will be valued at 63-times of FY27-ended earnings. This revised valuation reflects the brokerage's positive view of Paytm's structural profitability journey, operating leverage, and robust performance in its core business revenue traction led by perfect operational execution amid cost optimisation initiatives was creditable. We believe that improvements in the credit cycle, sustained merchant additions, and the revival of 'Rent on Credit Card (CC)' will act as key growth levers,' said the analyst firm. Dolat Capital added that Q1FY26 marked the first quarter of profitability at both the EBITDA and PAT levels, achieved without any one-off elements or gains, underscoring the quality and sustainability of the analyst firm highlighted Paytm's efficient execution and disciplined cost control as key drivers behind its solid revenue momentum. It sees additional upside from improving loan market conditions, ongoing merchant acquisition, and renewed traction in credit card-based rent payments.'We believe that improvements in the credit cycle, sustained merchant additions, and the revival of 'Rent on CC' will act as key growth levers,' noted the brokerage Q1FY26, Paytm reported a PAT of Rs 123 crore and EBITDA of Rs 72crore, respectively. The company's operating revenue rose 28% YoY to Rs 1,918crore while the contribution profit increased 52% YoY to Rs 1,151 Cr with the contribution margin improving to 60%.Financial Services revenue grew 100% YoY to Rs 561 Cr, driven by continued expansion in merchant loans, trail revenue from Default Loss Guarantee (DLG) portfolio, and improved collection performance.- Ends
Mint
22-07-2025
- Business
- Mint
Paytm swings to ₹123 cr Q1 profit, aided by AI-led cost efficiency; rejigs board
Advertisement One97 Communications, Paytm's parent company, on Tuesday reported a net profit of ₹123 crore in the April-June quarter of FY26 (Q1FY26), buoyed by artificial intelligence-led improvements in its cost structure. This sharp turnaround comes after a ₹539.8 crore loss in the three months through March, driven mainly by a one-time exceptional expense of ₹492 crore from accelerated ESOP cost and an additional ₹30 crore in other impairments. Excluding these exceptional items, the adjusted loss had stood at ₹23 crore in Q4FY25. The Noida-based company's first-quarter results, announced in an exchange filing after market hours, mark a significant recovery from an ₹840 crore net loss in the June quarter of the previous fiscal year. Advertisement Shares of the company settled 3.4% higher at ₹1,052.60 apiece on the BSE on Tuesday. The company also reported a positive Ebitda (earnings before interest, taxes, depreciation, and amortization) of ₹72 crore in the quarter. 'This is the first quarter where we've reported pure Ebitda, without adjusting for ESOP costs. Going forward, we'll remove the ESOP line entirely, and report pure employee expenses,' Vijay Shekhar Sharma, Paytm founder and chief executive officer, said during an earnings call on Tuesday. Consolidated revenue from operations in Q1FY26 rose 28% year-on-year to ₹1,918 crore, helped by an increase in merchant subscription and growth in financial services revenue, the company added. Meanwhile, sequentially, the revenue remained almost flat. Advertisement 'Merchant payments, across both small and large online and offline enterprises, will remain a key focus, and we expect a lot of innovation in that area,' said Madhur Deora, president and group chief financial officer. 'While wallet and BNPL (buy now, pay later) are not immediate quarterly priorities, we are actively working on them. We will continue to grow our merchant lending business, while personal loan growth will depend on a broader recovery in the market.' Rahul Jain, director at Dolat Capital, noted that while Paytm has mentioned about focus on these products, no timelines were provided for some new product initiatives. 'Growth for now will be led by merchant payments and merchant loans.' The company also announced a rejig of its board. Deora will step down from the board after the upcoming AGM but will continue in his role as the company's finance head. Advertisement 'Operating responsibilities are far more important for now, especially with our future growth line items, they're all geared towards consistent profitability from the same core businesses, international expansion,' said Sharma. He added that Deora's focus will, hence, shift towards active business decisions and growth opportunities. The board also appointed Urvashi Sahai, currently Paytm's General Counsel, as a Whole-time Director for a five-year term starting 22 July. Independent Director Bimal Julka also resigned, citing a desire to focus on interests in emerging technologies and ease of doing business. Forward looking plans Overall, analysts believe the company has shown recovery across financial metrics. Dolat Capital's Jain said, 'The results were better on all fronts, with strong profitability driven by steady growth, efficient cost management, and improved execution.' Advertisement Paytm earns most of its revenue from payments, financial, and marketing services. Payment services revenue (including other operating revenue) rose 23% YoY to ₹1,110 crore. Net payment revenue increased 38% YoY to ₹529 crore due to a rise in payment processing margin and device additions, the company said. For incremental revenue, while the company had expressed optimism in the last quarter about monetising its UPI services if the government re-introduced the Merchant Discount Rate (MDR), that potential revenue lever for the payments business now appears to be off the table. In June, finance minister Nirmala Sitharaman clarified that no MDR will be levied on transactions via the Unified Payments Interface (UPI), putting to rest earlier industry speculation that large merchants might soon be subject to the charge again. Advertisement This policy clarity may impact Paytm's plans to drive incremental revenue through UPI monetisation. 'We will see what happens as and when we get informed. We are not basing our business on some distant hope of the future. We are committed to continue to drive profitable business even without it,' said Sharma. In October last year, National Payments Corporation of India had allowed Paytm to onboard users on its UPI platform through partner banks, after the RBI barred Paytm Payments Bank from onboarding new customers due to compliance concerns. Revenue from financial services rose to ₹561 crore, up 3% quarter-on-quarter from ₹545 crore. This revenue also doubled year on year from ₹280 crore, led by merchant loan disbursements and improved collections from the default loss guarantee (DLG) portfolio. However, a shift to non-DLG disbursements by its largest lending partner is expected to slow sequential revenue growth even as disbursements rise. Advertisement Under DLG, Paytm gives a guarantee to its lending partners for a portion of the loans it facilitates in case of a default. The overall financial services customer count increased slightly in the quarter to 560,000. 'There is no significant recovery in terms of personal loans, the mix of merchant and personal loans remains the same as of last quarter,' said Deora.
Mint
18-07-2025
- Business
- Mint
JSW Steel starts FY26 on a high but remains cautious
Mumbai: JSW Steel Ltd reported better-than-expected profit for the June quarter, driven by higher production and sales volume as well as lower cost of coking coal, a key ingredient. The steelmaker's first-quarter profit jumped to ₹ 2,209 crore from Rs.867 in the same quarter a year ago, according to the company's exchange filings. A key reason for this was improved steel prices, primarily due to the government's 12% safeguard duty to protect the industry from cheap steel imports from China. 'Steel prices rose during the quarter, while sales volumes also picked up due to the ramp-up of the Vijayanagar expansion project,' said Suman Kumar, analyst at Dolat Capital. The rise in steel prices, however, is a temporary phenomenon and the management believes the government needs to do more to ensure greater profitability for Indian steelmakers, he added. JSW Steel, India's largest steelmaker by capacity, reported consolidated revenue of ₹ 43,147 crore for the April-June quarter, up from ₹ 42,943 a year earlier, beating the ₹ 42,790 crore projection, on average, of 23 analysts polled by Bloomberg. JSW Steel benefited from lower cost of raw materials, mainly coking coal, which was partly offset by higher fuel consumption due to planned blast furnace shutdowns. Mining royalties also fell, helping reduce total expenses. Earnings before interest, taxes, depreciation, and amortization (EBITDA) in the first quarter rose 37% year-on-year to ₹ 7,576 crore. The steelmaker maintained its production and sales guidance for 2025-26 at 30.5 million tonnes and 29.2 million tonnes, respectively. JSW Steel spent ₹ 3,400 crore in the June quarter out of its estimated capital expenditure of ₹ 20,000 crore for FY26. For FY25, JSW Steel had initially estimated a capex of ₹ 20,000 crore before lowering it to ₹ 16,000 crore. It missed that revised target, spending only ₹ 14,656 crore in FY25. The steelmaker reported consolidated production of 7.26 million tonnes for the June quarter, a 14% rise from a year ago. Sales volume improved 9% to 6.69 million tonnes. In an post-earnings interaction with analysts, JSW Steel's management said the company's sales volume would increase in the second quarter as the maintenance shutdowns were completed. Also, a second converter at JSW Vijayanagar Metallics Ltd is being commissioned, which will help lower the cost of production, they said. However, demand could weaken in the ongoing second quarter due to the monsoon rains. 'In Q2, the management expects to see some seasonal weakness in volumes due to the monsoon. While steel prices have come down, the company expects a further drop in coking coal prices, which will partially offset the price decline. The long-term outlook remains optimistic,' said Kumar. JSW Steel's management also said that it expects a favourable decision when the government reviews the safeguard duty on steel imports. The government imposed the 12% safeguard duty on 21 April for a period of 200 days. Although finished steel imports have moderated, exports also fell, and India continues to be a net importer. JSW Steel's management expects low priced imports to remain a concern, stressed by changes in globaltrade flows due to rising tariff uncertainties. The management also noted that while there has been some reduction in steel production in China in recent months, elevated exports of Chinese steel remain a challenge for India's steel industry. JSW Steel also said, based on legal opinion, that it had gained control over Bhushan Power and Steel Ltd as on 30 June and was continuing with the consolidation of BPSL's financial results with its results. The steelmaker expects to be compensated adequately if BPSL goes into liquidation after the SupremeCourt scrapped its resolution plan for the bankrupt company, as Mint reported on 23 May. JSW Steel has filed a review petition on the apex court's decision. JSW Steel shares closed Friday's trading on BSE mostly unchanged at ₹ 1,034.40 each. The stock has gained 14.24% so far this year, while the benchmark Sensex index has risen 4.14%.
Business Insider
29-06-2025
- Business
- Business Insider
Dolat Capital Sticks to Its Buy Rating for Havells India Limited (HAVELLS)
In a report released yesterday, from Dolat Capital maintained a Buy rating on Havells India Limited (HAVELLS – Research Report), with a price target of INR1,838.00. The company's shares closed yesterday at INR1,566.80. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Currently, the analyst consensus on Havells India Limited is a Moderate Buy with an average price target of INR1,802.00, implying a 15.01% upside from current levels. In a report released on June 24, Macquarie also maintained a Buy rating on the stock with a INR1,836.00 price target. The company has a one-year high of INR2,104.95 and a one-year low of INR1,360.05. Currently, Havells India Limited has an average volume of 37.59K.
Economic Times
18-06-2025
- Business
- Economic Times
Rahul Jain's on 6 large & midcap IT stocks to bet on, explains what's driving sectoral outperformance
Rahul Jain, Director, Dolat Capital, favours LTIM due to its order book growth and potential stability following a CEO change, anticipating a return to pre-Covid growth levels. HCL Tech's consistent outlook and Infosys' potential guidance increase also make them attractive. In the midcap space, Mphasis, KPIT, and eClerx are favored for their growth potential relative to valuation. ADVERTISEMENT We have seen Nifty IT outperforming the rest of the market this month. What is driving this sudden strength? Is it just pure sector rotation? Is it the churn that we are seeing or do you believe fundamentally this has merit in terms of the way Nifty IT has been outperforming? Rahul Jain: A part of this could be related to the kind of correction that we saw in the February-March period when the expectation for the sector in terms of growth in earnings were much higher and subsequently the valuation corrected. When the earnings started, we got a mixed set of commentary where some companies saw a lot of impact related to the macro or the tariff kind of a thing, while many other companies said that they have seen very limited observation in terms of any deterioration related to that. Since the earnings, one-and-a-half, two months have gone and we have not seen any further deterioration, rather on the tariff side, there is a lot of normalisation that has happened with many countries. Some bit of ambiguity will come into play as tariffs eventually come into picture. But for now, no bad news has acted as good news in the space. Valuations were low, growth expectations are low, and valuation can see some room for upside if the growth eventually improves. The market is anticipating that as the year progresses and there is no incremental bad news shaping up in the sector. The growth assumption in the sector will eventually improve and will drive the valuation. So, that is something which is finding value in this space at this point and should continue as the year progresses. The valuation comfort is still there, but also gives us some sense how the deal momentum is picking up. Is there anything incremental that you are picking up right now because back in the earning season, we have seen quite a mixed commentary coming in especially with respect to discretionary spending in the US. Has anything changed in terms of the pickup over there? Rahul Jain: We keep getting those press releases by the respective companies where they announce important deals once in a while, so that is a usual activity. But we do not hear from our recent interaction with companies where they are seeing the stalling of the ramp up. Stalling of the ramp up has been a bigger pain point in the last two years, more than the deal gaps itself. I agree that the deal win momentum is quite mixed across players and it is not very uniform. But we could also see that there was a lot of ambiguity in the mind of the spenders also in that period. Now those things are getting streamlined to some degree and may happen more in Q1 as tariffs eventually take into action. Then probably there could be an opportunity of pent-up demand coming starting from Q2, Q3 onwards. ADVERTISEMENT There is also one very big trend on the Gen-AI side where the adoption is coming closer on, the timeline point of view, which itself could also be another round of trigger for tier I vendors to begin with in India. Those are the two triggers pending and whether they happen after Q1 or later in the year, is something that we need to work on. So far with the expectation coming into play, so far giving the opportunity that is available to us, we are in the bottom part and we would only see things improving here on. What is your sense on how much the AI disruption is already in the price or how much of it is yet to be seen because it is such an evolving landscape out there? Rahul Jain: It is very difficult to measure it in a very precise manner, but going by the past cycle of various technology trends that has always been perceived as a risk to the sector. So we have seen that when there was too much talk around blockchain in digital or many other technology trends in the early stage of adoption, there are a lot of boutique companies which play roles which are very tech savvy, very individual led, smaller setup, doing pilots for a lot of companies. ADVERTISEMENT But once these global enterprises decide that they need a mass rollout, and scale this technology enterprise wide, then their key support vendors are the same top 10 companies. So, when the mass deployment of those technologies has to happen, they eventually rely on the likes of Accenture, TCS, Infosys, and the like. I think that is what will happen with AI also eventually. Are we six months away from that trend? Are we one-year away from the trend? We do not know. But the smartest people on the AI side talk about how we will see mega adoption within 12 to 24 months. Some of that early trend could happen in the next six months and it may scale up 18 months from now based on those understanding, but it is very difficult for any one of us to single out that this is when there will be a big shift. ADVERTISEMENT Even when we are talking about the entire outperformance in the Nifty IT space, there is one basket in particular that is midcap IT which has outperformed the overall basket. Do you still see valuation comfort over here? If you had to place your bets in the entire IT space, would the midcaps be making it to your radar? Rahul Jain: The whole logic of why IT midcap has been doing so well for so long over tier I names is the sheer difference in the growth rate of these companies and these companies are growing anywhere between 12% and 18% on organic basis and in some cases, there is inorganic element as well. While the largecaps are at a very reasonable valuation, their growth in the last three-five years except for one year in between because of Covid – their 10-year CAGR – is in that high single to mid-single digit basis. So, for a lot of companies, the filtration of investment would only come if the growth can compound in early double digits at least and that is the reason people are seeing more value in stories that can become large and can grow faster. So, the likes of Persistent, Coforce, KPITs – which are reasonable in terms of size with close to $500 million to $2 billion revenue band, are behaving like larger midcaps. They are not midcap or tier II as such, they are good in size on their own and where there is a lot of money can be deployed. So, those are the areas where people are parking money because of the growth rate differential. ADVERTISEMENT Over a period of time, once the growth differential is also narrow, the valuation differential will narrow as well. That is something we are waiting for. Once we see a better IT cycle, the growth differential will narrow. In a troubled environment that we have seen in the last two, two-and-a-half years, companies with much higher execution and much smaller size become an advantage and that is what we have seen in some companies. While a largecap does take a hit because of the macro spending factors, that explains why that differentiation has happened. Would you elaborate on that? What is your pecking order in terms of your preferred list from within it? Rahul Jain: There are three-four names which we like and these have a lot of short-term as well as long-term reasoning behind. Within the larger caps, we like LTIM. Here the order book growth has been decent on the closing basis of FY25 and a CEO change can probably bring in some kind of stability on the top layer which has seen some attrition in the last 12-18 months. That is something which we like and the companies historically pre-Covid also have been doing better in terms of growth versus the tier I peers. So, it is where a large business which can do well and is reporting below its potential for the last two-three years, has good potential to do better from here on. So, that is one largecap name that we like. We also like HCL Tech given its consistent, decent confident outlook for this year and we also see potential for Infosys to gradually scale up its guidance later in the year. These are the two-three names that we like in the tier I pack. Other largecap companies we like less. On the midcap side, some of the good businesses are very expensively priced. So, leaving those aside, right now we like Mphasis, KPIT, eClerx. These are some of the companies where growth versus valuation provides an opportunity to make money even from this point. So, these are the names that we are liking within the mid-tier to smallcap. (You can now subscribe to our ETMarkets WhatsApp channel)
