The shares of the giant digital payment company Paytm have fallen by 27 percent. But despite this much correction, the opinion of analysts is not positive about this stock. The stock had touched the lower circuit of 20 per cent on the day of listing itself. But analysts still feel it is overvalued. This stock is still expensive in the eyes of the market, as well as the loss to the company is also preventing analysts from advising them to buy this stock.
IIFL Securities Sanjeev Bhasin, director, says, “I don’t think buying Paytm shares is a good buy. I believe it is overpriced. Significantly, the share of Paytm’s parent company one 97 Communication has fallen 27 percent below its IPO price. Due to such a huge fall in it on the very first day, a lot of investors’ money was lost. On Thursday, the shares of Paytm fell from the IPO price of 2150 to Rs 1,560. ,
There is a decline so it is not good to buy
Sanjeev Bhasin says that Paytm’s stock opened at Rs 1,955 on BSE, which was 9.07 percent less than its IPO price. After a few minutes of trading that day, it fell by 15 percent. Now this stock has gone down to 20 to 25 percent and now to 27 percent. Investors are thinking that Paytm shares can be bought in this big fall. But even after such a fall, this stock can not be given BUY rating. So this stock should not be bought now. One should wait till this stock becomes stable. It should be seen what color the market will take in the coming days.
Ajit Mishra, Research Vice President, Religare Broking, says that despite the huge fall, it is not right to enter Paytm right now. He said, “We had said earlier also in a note that many news age companies are in other businesses, investors should pay attention there. Investors should not bet too much in a single company like Paytm. One should not enter Paytm even at the current level.
Aditya Kondavar, COO, JST Investments says that Paytm’s business is complex, due to which its stock is going down. Many investors are not understanding what Paytm does after all. And how is it making its profit. Actually Paytm is not a leader in the business it is in. It is true that the Paytm brand is very expensive but there is no safety margin in the current valuation.
Foreign brokerage firm Macquarie is also expressing the same concern. It had projected a 44 per cent drop from the IPO price. This firm says that at present Paytm is spending cash and it has put its hands in many places. The brokerage firm says that positive free cash flow in Paytm will start only in 2029-30.
No Paytm, then where to invest?
Sanjeev Bhasin says that instead of Paytm one should invest in large cap IT stocks. He said, “We are bullish on stocks like TCS, Wipro, Infosys, Tech Mahindra. Investors should invest in these. However, Ajit Mishra says that investors should invest in stocks like Nykaa, Zomato, Policybazaar. However, he says that considering the expensive valuations, they should invest in them gradually.
(Article: Kshitij Bhargava)
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
Get Business News ,, latest India News ,, and other breaking news on share market, investment scheme and much more on Business Khabar. Like us on Facebook, Follow us on Twitter for latest financial news and share market updates.
.