Fintech
Paytm among the worst performing Fintech stocks as earnings loom
(Bloomberg) — Shares of India’s Paytm are among the worst performers globally ahead of an earnings report that is expected to show mounting losses for the struggling payments platform.
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The stock has fallen about 61% over the past six months, the second-worst decline in that period in Bloomberg’s World Index, which tracks large- and mid-cap companies globally. It is also last in the Nifty 500 index.
The drop comes after India’s central bank ordered Paytm’s banking subsidiary to halt much of its operations in January, dealing a blow to the fintech pioneer and triggering a sharp sell-off in its shares. The Reserve Bank of India has told Paytm Payments Bank Ltd. to close all banking operations by March 15.
Both Paytm and Paytm Payments Bank are part of billionaire Vijay Shekhar Sharma’s fintech empire, but the bank is not controlled by the publicly listed mobile wallet company.
Read more: Everything you need to know about Paytm Bank’s surprise suspension
One 97 Communications Ltd., Paytm’s parent company, is expected to see losses widen on Wednesday in its first earnings release since the restrictions were announced.
Fourth-quarter net loss is expected to widen to 4.6 billion rupees ($55 million) from 1.7 billion rupees a year earlier, according to data compiled by Bloomberg. Revenue is expected to remain unchanged at 23.4 billion rupees.
Of the 16 analyst recommendations on Bloomberg, seven suggest selling the stock while the remaining nine have a buy or hold call. The average 12-month price target is Rs 468, 30% higher than the current price level.
Anand Dama, an analyst at Emkay Global, expects a further 16% correction, arguing that fourth-quarter results “will not capture the full extent of business disruptions caused by declines in UPI and payments market share.” invoices”.
The fintech empire founded by Sharma has seen several senior executives leave following the RBI crackdown, including Surinder Chawla, chief executive of its banking unit, and Bhavesh Gupta, former COO and chairman of Paytm.
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