- BofA raised One 97 Communications target price to Rs 1,290 from Rs 1,230
- BofA maintained a Neutral rating on One 97 Communications stock price
- BofA increased EPS estimates for FY26, FY27, and FY28 due to cost optimisation
Paytm's parent One 97 Communications Ltd. share price recovered from opening lows as BofA raised the target price. The US-headquartered brokerage firm believes that the business momentum is stable and there is more room to cut costs.
The brokerage has raised the target price to Rs 1,290 apiece from Rs 1,230 apiece. This implied a 5% upside from Thursday's close. BofA maintained a Neutral rating on the stock price.
BofA's recent industry channel checks confirmed that the business momentum for payments, merchant soundbox and merchant lending businesses of One 97 Communications are stable.
BofA has increased the earning per share estimates to Rs 11.05, Rs 24.73, and Rs 43.49 for financial year 2026, 2027, and 2028, respectively. The reason behind the upgrade is that the brokerage believes there is more room for cost optimisation.
BofA also projected that there will likely be more upgrades on EPS in the next three to five months.
The brokerage did not upgrade revenue estimates because income from lending, especially in the postpaid segment, remained sluggish. BofA also refrained from altering the multiple estimates because of no revenue improvement in sight.
Paytm has re-launched the 'Buy Now Pay Later' lending services on UPI in collaboration with Suryodaya Small Finance Bank. This service will assist One 97 Communications to scale up the business in the medium term.
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One 97 Communications share price fell 0.36% to Rs 1,224.9 apiece shortly after open. However, the stock price erased losses to trade flat at Rs 1,229 apiece as of 9:44 a.m., compared to 0.33% decline in the NSE Nifty 50 index.
The stock advanced 87.56% in 12 months, and 20.76% on year-to-date basis. The relative strength index was at 56.15.
Out of 18 analysts tracking the company, nine maintain a 'buy' rating, five recommend a 'hold' and four suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies a downside of 4.8%.
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