Paytm's shares plunged by 8.84% today, hitting an intraday low of ₹773.90 before recovering slightly to ₹827.50. This 2.53% drop followed reports of an Enforcement Directorate (ED) investigation linked to a cryptocurrency scam involving Paytm and other fintech companies such as Razorpay.
Paytm Denies Allegations in ED Investigation
In response to media reports, Paytm issued a clear statement:
- No New Notices: Paytm has not received any new communication from the ED regarding the allegations.
- Older Inquiries: The investigations pertain to third-party merchants unaffiliated with the Paytm group.
- Full Compliance: Paytm assured that it has fully cooperated with authorities in earlier inquiries.
Financial Results: A Mixed Picture
Despite the negative news, Paytm's financial performance reveals signs of improvement:
- Loss Reduction: The company narrowed its Q3 FY25 loss to ₹208 crore from ₹222 crore in the same quarter of the previous year.
- Revenue Decline: Revenue fell by 36% YoY, from ₹2,850 crore in Q3 FY24 to ₹1,828 crore in Q3 FY25.
- Profitability Progress: Paytm achieved an adjusted EBITDA of ₹560 crore in FY24, a significant turnaround from a ₹1,650 crore loss in FY21.
Analysts See Long-Term Growth Potential
Financial experts remain optimistic about Paytm’s growth trajectory:
- Margin Expansion: Contribution margins are expected to increase by 500 basis points over the next five years.
- Profitability Forecast: A marginal incremental profitability (MIP) of 36% between FY25 and FY30 is projected.
conclusion:
The ongoing ED probe has undeniably added pressure to Paytm’s stock performance, but its improving financial metrics and long-term growth potential offer a glimmer of hope. Investors should closely monitor developments in the investigation and keep an eye on technical support levels.
Paytm’s focus on transparency and profitability underscores its commitment to regaining investor trust in an increasingly competitive fintech market.
Launch your Graphy