⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
PAYTM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.4
| Stock Code | PAYTM | Market Cap | 74,164 Cr. | Current Price | 1,159 ₹ | High / Low | 1,382 ₹ |
| Stock P/E | 224 | Book Value | 199 ₹ | Dividend Yield | 0.00 % | ROCE | -11.8 % |
| ROE | -12.0 % | Face Value | 1.00 ₹ | DMA 50 | 1,265 ₹ | DMA 200 | 1,141 ₹ |
| Chg in FII Hold | 0.04 % | Chg in DII Hold | 0.37 % | PAT Qtr | 145 Cr. | PAT Prev Qtr | 131 Cr. |
| RSI | 37.0 | MACD | -41.0 | Volume | 98,78,659 | Avg Vol 1Wk | 61,18,097 |
| Low price | 652 ₹ | High price | 1,382 ₹ | PEG Ratio | 22.2 | Debt to equity | 0.01 |
| 52w Index | 69.5 % | Qtr Profit Var | 171 % | EPS | -9.98 ₹ | Industry PE | 28.7 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT improved from ₹131 Cr. to ₹145 Cr., but overall profitability remains weak with EPS at -₹9.98.
- Return Metrics: ROE at -12.0% and ROCE at -11.8% highlight poor capital efficiency and negative returns.
- Debt Position: Debt-to-equity ratio at 0.01 shows negligible leverage, but losses limit financial strength.
- Cash Flow: No dividend yield (0%), reflecting reinvestment focus and lack of shareholder payouts.
💹 Valuation Indicators
- P/E Ratio: 224, extremely high compared to industry average of 28.7, indicating severe overvaluation.
- P/B Ratio: Current Price ₹1,159 vs. Book Value ₹199 → ~5.8, trading at a steep premium to book value.
- PEG Ratio: 22.2, very high, reflecting poor growth-adjusted valuation.
- Intrinsic Value: Current valuation appears speculative; intrinsic value likely far below market price given negative returns.
📱 Business Model & Competitive Advantage
- Paytm operates in digital payments, fintech, and financial services, benefiting from India’s digital adoption wave.
- Competitive advantage lies in brand recognition, large user base, and ecosystem integration.
- However, profitability challenges and regulatory scrutiny weigh heavily on long-term sustainability.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Risk-tolerant investors may consider accumulation near ₹650–750, closer to 52-week low, for speculative exposure.
- Long-Term Holding: Only suitable for high-risk investors betting on fintech growth; fundamentals do not support long-term holding at current valuation.
Positive
- Sequential PAT growth from ₹131 Cr. to ₹145 Cr.
- Negligible debt-to-equity ratio (0.01), ensuring minimal leverage risk.
- DII holdings increased (+0.37%), showing domestic institutional support.
Limitation
- Negative ROE (-12.0%) and ROCE (-11.8%).
- Extremely high P/E ratio (224) compared to industry average (28.7).
- High P/B ratio (~5.8) indicates steep premium valuation.
- No dividend yield, limiting investor returns.
Company Negative News
- Consistent negative EPS (-₹9.98), reflecting weak profitability.
- MACD negative (-41.0), signaling bearish momentum.
Company Positive News
- Quarterly PAT improved sequentially.
- FII holdings increased slightly (+0.04%), showing marginal foreign investor confidence.
- RSI at 37.0 indicates stock is near oversold territory, potential for short-term rebound.
Industry
- Fintech industry P/E at 28.7, far lower than Paytm’s 224, highlighting overvaluation.
- Sector outlook supported by digital adoption, but profitability remains a challenge for many players.
Conclusion
- Paytm shows strong brand presence and ecosystem advantage but suffers from weak profitability and overvaluation.
- High multiples and negative returns make it unattractive for conservative investors.
- Best considered for speculative entry near ₹650–750, with cautious outlook until profitability improves.
I can also prepare a valuation heatmap comparing Paytm with other fintech peers to highlight where it stands in terms of P/E, ROE, and growth potential. Would you like me to create that?