PAYTM share price has witnessed a major decline within a few trading sessions, leaving long term investors in a dilemma about the next support level for the stock. PAYTM opened today at Rs 828 and touched intraday low at Rs 785 before closing the session at Rs 788. The 7 percent decline has pushed its price below Rs 800. The stock has recently touched 52-week high at Rs 1,062 and the current closing marks a significant correction from yearly highs. As the company's management took some steps in the right direction in the recent months, PAYTM has witnessed a strong rally from Rs 400 in July 2024. Market players were expecting a correction in the fintech counter but this correction has been rather steep, not even giving a chance for investors to exit their position.

Paytm, a leader in India's fintech landscape, is set to announce its third-quarter results for FY25 on January 20, 2025. The company recently achieved a significant milestone by posting its first-ever quarterly profit during Q2 FY25, reflecting its turnaround efforts. Strategic initiatives, including the sale of its stake in Japan's PayPay Corp and the divestiture of its ticketing business to Zomato, have bolstered financials. While market experts advise caution and profit booking at current levels, Paytm’s upcoming results will play a pivotal role in shaping investor sentiment and the company’s growth trajectory.

Key Financial Highlights

Profit turnaround in Q2 FY25: Paytm posted its first-ever quarterly profit of Rs 928.3 crore in the September 2024 quarter. This marked a remarkable recovery from a record loss of Rs 838.9 crore in Q1 FY25 and a loss of Rs 290.5 crore in Q2 FY24.

Exceptional gain boosts Q2 earnings: The fintech firm recorded an exceptional gain of Rs 1,345.4 crore in Q2 FY25, attributed to the sale of its ticketing business to Zomato in August 2024. This strategic divestiture highlights Paytm’s focus on streamlining operations and concentrating on its core digital payment and financial services segments.

Strategic Divestments to Optimize Operations

Sale of PayPay Corp stake: In December 2024, Paytm’s Singapore subsidiary sold its stake in Japan’s PayPay Corp, underscoring the company’s ongoing strategy to optimize its investment portfolio and enhance liquidity.

Focus on core strengths: These moves reflect Paytm’s commitment to shedding non-core assets, allowing it to focus on scaling its digital payment, lending, and financial services ecosystem in India.

Market Expert Recommendations

Profit booking advised for bottom investors: According to Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, “Investors who purchased Paytm shares during the all-time low of Rs 310 have reaped substantial gains. They should consider booking profits at current levels.”

For high-risk traders: Bathini suggests that traders with a long-term view and a high-risk appetite may choose to hold the stock as the company’s upcoming Q3 FY25 results could influence its trajectory.

Upcoming Q3 Results: A Critical Moment

Paytm’s Q3 FY25 results, scheduled for January 20, 2025, will be closely watched by investors and analysts. Key focus areas include:

Revenue growth: Insights into digital payment adoption and financial service expansion.
Profitability metrics: Sustainability of its Q2 profitability milestone.
Cost optimization: Updates on efforts to reduce operational expenses.

Outlook for Investors

Short-term strategy: Investors who capitalized on Paytm’s historic low may consider partial profit booking given the stock’s impressive rebound and current valuations.
Long-term perspective: Traders with a bullish view on digital payments and fintech growth in India may hold onto their positions, banking on Paytm’s evolving business model.
Key risks: The upcoming quarterly results, competitive pressures, and regulatory challenges could affect the stock’s momentum.