Paytm share price slowly nears its make or break point
Paytm (NSE: PAYTM) share price has made a strong bullish trend since November last year as investors ride the wave. After tumbling to a record low of ₹438 in November, the stock has jumped by more than 80% and is hovering at the highest level since August 12th.
One 97 business is doing wellCopy link to section
One 97, the parent company of Paytm, business is doing well as demand for payment solutions rose. The most recent results showed that the company’s revenue jumped by 61% year-on-year basis. Its revenue jumped to over ₹2.33 crore as the company boosted its payment monetization and loan business.
Most importantly, the company became profitable from an EBITDA perspective. The company’s Monthly Transacting Users (MTU) jumped by 27% while merchant subscriptions rose by 134%. Gross Merchandise Value (GMV) in the quarter jumped to ₹2.6 lakh crore, which is equivalent to over $32 billion.
The value of loans distributed in the platform soared by 253%. With interest rates sitting at the highest level in years, there is a likelihood that its loan portfolio will be more profitable.
I believe that Paytm has a huge opportunity ahead even as the level of competition rising. Some of the biggest competitors for the company are GooglePay, PhonePe, and MobiKwik. Most importantly, the company has switched its focus from growth to profitability. Analysts see the company becoming more profitable this year.
Paytm share price forecastCopy link to section
In my last article on One 97, I noted that the stock had more upside. At the time, the stock was trading at ₹650, meaning that the prediction was accurate. The shares have jumped above the important resistance level at ₹736, the highest point on February 9th and May 11th of this year.
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The stock has jumped above the 25-day and 50-day exponential moving averages (EMA). Most importantly, it is approaching the crucial resistance level at ₹842, the highest point on August 8th.
It has now formed a golden cross, where the 50-day and 200-day EMAs make a bullish crossover. Therefore, the outlook of the stock at this stage is neutral until it moves above the key resistance point at ₹842. A move above this level will see it jump to the next resistance level at ₹1000. On the flip side, a drop below the next key support at ₹650 will invalidate the bullish view.