Daijiworld Media Network – Mumbai
Mumbai, Jul 21: Shares of One 97 Communications, the parent company of fintech platform Paytm, erased early gains and slipped into the red on Tuesday after the company announced its April-June quarter (Q1 FY27) results and dropped plans for what would have been its first-ever bonus share issue.
The stock opened at Rs1,339.80 on the BSE, marginally below its previous close of Rs1,348, before climbing to an intraday high of Rs1,382.90, up 2.58 per cent. However, the gains proved short-lived as the stock reversed course and fell to a low of Rs1,311.65, down 2.7 per cent from the previous close and nearly 5 per cent from the day's peak.
Despite Tuesday's decline, Paytm shares have outperformed the broader market, gaining around 5 per cent so far this year and 34 per cent over the past 12 months, compared with declines of 8.9 per cent and 5.5 per cent, respectively, in the BSE Sensex. Over the last two years, the stock has surged about 197 per cent, although it continues to trade well below its IPO price of Rs2,150.
For the first quarter of FY27, the Noida-based fintech firm reported a consolidated net profit of Rs220 crore, marking a 79 per cent increase from Rs123 crore in the corresponding quarter last year. On a sequential basis, profit rose 19.5 per cent.
Revenue from operations increased 27.6 per cent year-on-year to Rs2,448 crore from Rs1,918 crore. However, other income declined 24.5 per cent to Rs182 crore during the quarter.
The company's total expenses rose 18.2 per cent to Rs2,383 crore from Rs2,016 crore in the year-ago period.
While the financial performance remained strong, investors were disappointed after the company's board decided not to proceed with the proposed bonus share issue.
In a statement, the board said that after evaluating the proposal from the perspective of long-term shareholder value, it concluded that the company should continue focusing on strengthening growth and profitability rather than issuing bonus shares at this stage.
Market experts viewed the quarterly performance positively despite the share price reaction.
Harshal Dasani, Business Head at INVasset PMS, said the latest results indicate that Paytm has moved beyond its turnaround phase into a period of operating leverage. He highlighted the company's revenue growth, record quarterly EBITDA of Rs203 crore, up 182 per cent year-on-year, and strong profit growth as signs that its cost structure has significantly improved.
According to Dasani, the next two quarters will be crucial in determining whether the company's operating margin can be sustained at current levels.
From a technical perspective, Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, said Paytm continues to trade above all its major moving averages, indicating a broader bullish trend.
However, he noted that the formation of a Shooting Star candlestick on the weekly chart suggests some near-term profit-booking could occur. Shah said a breakout above the Rs1,380-1,410 range could trigger a rally towards Rs1,500-1,510, while the Rs1,250-1,255 zone is expected to provide strong support. A sustained fall below Rs1,250 could see the stock decline towards the Rs1,210 level.