Paytm shares rally 18% in last-hour surge: Is there more upside?

Despite the rally in shares, Paytm's stock is still down 24.51% from its 52-week high of Rs 998.30, recorded on August 20, 2023.

In Short

• Paytm shares soar 18% during Tuesday's last-hour surge
• Analysts predict Paytm stock could reach Rs 900 soon
• Strong support at Rs 664 and Rs 650 levels, say experts

Shares of One 97 Communications, the parent company of Paytm, experienced a strong rally in the latter part of the day on Tuesday, surging by 18.47% to reach an intraday high of Rs 771.95. By the close of the trading session, the stock had settled 15.65% higher at Rs 753.60.

The stock’s impressive rise has seen it deliver multibagger returns, rallying by 143.10% from its one-year low of Rs 310, which it touched on May 9, 2024. Despite this surge, Paytm's stock is still down 24.51% from its 52-week high of Rs 998.30, recorded on August 20, 2023.

One of the key drivers behind this recent surge is Paytm Money, a wholly-owned subsidiary of One 97 Communications. The company announced the launch of its BSE futures and options (F&O) trading service on the platform. This move is expected to attract more retail investors, with trading charges set at a competitive Rs 20 per trade, making it an affordable option for many.

From a technical standpoint, analysts remain optimistic about Paytm's stock. Several market experts have suggested that the stock could see further gains, with an upside target as high as Rs 900 in the short term. The stock has strong support at Rs 664 and Rs 650 levels.

According to market expert Raghvendra Singh, “The stock has shown a strong breakout above Rs 700. Investors can hold it with a target of Rs 850 to Rs 900 in the near term. There’s even potential for the stock to cross Rs 1,000 in the next three months if the momentum continues.”

Similarly, Ameya Ranadive, Senior Technical Analyst at StoxBox, highlighted Paytm’s current position, stating, “The stock is trading at Rs 750, which shows considerable strength. If the momentum continues, the stock could rally towards Rs 860. However, the critical support level is around Rs 650, and a fall below that could lead to a potential decline.”

AR Ramachandran, a Sebi-registered research analyst, also supports this view. He stated, “The daily charts are bullish, with strong support at Rs 664. If the stock closes above the resistance level of Rs 756, we could see an upside target of Rs 860 in the short term.”

Paytm has recently made headlines for selling its entertainment ticketing business to Zomato for Rs 2,048 crore in August 2024. While this sale provided a boost to the company’s finances, Paytm has been under pressure due to restrictions placed on its Payments Bank operations by the Reserve Bank of India (RBI) last year. These restrictions were related to non-compliance and other supervisory concerns.