One97 Communications Ltd. share price target

Paytm has agreed to sell its entertainment ticketing business to Zomato for INR20.48b in cash, which will allow Paytm to strengthen its focus on its core Payments and Financial Services Distribution business.

As part of its strategy of focusing on the dwindling core business—viz. Payments and Financial Services— post RBI action, Paytm is exploring a deal with Zomato (foodtech) to transfer its high-margin (take rate: 5-8%) movies and event ticketing business (a subset of Marketing Services); this is likely to hit Paytm’s customer traffic.

We initiate coverage on One97 Communications (OCL-Paytm) with REDUCE and
a ~13% downside. Following the recent regulatory salvo, the stock has
corrected ~55% (~80% from its post-IPO peak in Nov-21), echoing the
expected business/revenue dislocation in the Payments/Financial Services
verticals; this was aggravated by high KMP attrition

16 analysts provide a consensus recommendation of Buy for PayTM with a share price target of Rs. 1002, indicating that analysts remain optimistic about the stock despite recent regulatory changes.