Shares of One 97 Communications Ltd (Paytm's parent company) skyrocketed in Friday's late trading session. The stock surged 13.86 percent, reaching a day high of Rs 631.30. At this pricing, the stock has become a multibagger, having rebounded 103.64 percent from its all-time low of Rs 310 on May 9 of this year.
The digital payments company recently sold its entertainment ticketing business to the online food aggregator Zomato for Rs 2,048 crore. The fintech startup has been under intense pressure since the Reserve Bank of India (RBI) imposed limitations on Paytm Payments Bank's activities last year, citing continuous noncompliance and serious supervisory concerns.
The regulatory problems and hazards will remain the same. Prashanth Tapse, Senior VP (Research) at Mehta Equities, told Business Today TV that only risky investors may gamble right now for the medium to long future.
"I believe the worst is behind. We may see some volatility as a result of the RBI's intervention and examination of IPO proceeds. "So, I'm not a buyer at the moment, but any dip will be a good buying opportunity," Tapse added.
On technical setup, experts generally recommended booking gains at present levels. With that stated, a convincing closing above Rs 650 is necessary for further gains.
"Paytm has lately witnessed a succession of rising highs, notably after hitting a low point in May, and has continued this pattern to date. Currently, Rs 530-520 is expected to cushion the trend. On the higher end, the counter is entering a large bearish gap with no apparent barrier. As a result, it is prudent to hold profits till the trend continues," stated Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, advised investors to book gains around Rs 630. Support would be priced at Rs 610, Singh added.
"Support will be at Rs 600, with resistance at Rs 650. A decisive closing over Rs 650 might spark a fresh rally towards 685. Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, predicted a short-term trading range of Rs 600 to Rs 700.
The stock moved above the 5-, 10-, 20-, 30-, 50-, 100-, 150-, and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) was at 72.55. A level less than 30 is regarded oversold, whereas a value more than 70 is considered overbought.
According to BSE, the carrier's stock has a negative price-to-equity (P/E) ratio of 17.92 and a price-to-book (P/B) value of 2.86. Earnings per share (EPS) were (-)30.95, with a return on equity (ROE) of (-)15.95.
