Macquarie Cap analyst further cuts Paytm target price, estimate at Rs 400
Paytm, the Indian digital payments startup
whose stock has slumped 71% since its November market debut, had its price
target reduced further by an Macquarie Capital Securities (India) Pvt. analyst
who was early to predict the company’s market troubles.
Macquarie’s Suresh Ganapathy cut his price estimate to 450 rupees
($5.90) from 700 rupees, citing lower valuations for fintech companies globally.
He didn’t change his earnings or revenue estimates for Paytm, which he rates
underperform. The stock rose to 634.05 rupees on Wednesday.
Paytm pulled
off the largest-ever initial public offering in India, but has since faced a
number of challenges. Ganapathy cited fintech regulations and stricter
compliance norms as potential headwinds -- on Friday, the Reserve Bank of India
barred the company’s Paytm Payments Bank
venture from accepting new customers, adding pressure on the stock.
The average 12-month price target among nine analysts covering Paytm is 1,203
rupees, according to data compiled by Bloomberg.
The initial public offering by One 97 Communications Ltd., the
parent company for Paytm, had been touted by some as a symbol of India’s
growing appeal as a destination for global capital, particularly for investors
looking for alternatives to China.
Ahead of the listing, Macquarie analysts including Ganapathy
initiated coverage with an underperform rating and a price target of 1,200
rupees. The IPO was priced at 2,150 rupees.
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