PAYTM

$***** | Vijay Kumar Gupta | SEBI Registered Research Analyst (INH000020226) 📌 My View: Paytm’s turnaround quarter has reignited investor interest, but the stock now tests critical supply zone. Short-term cooling is possible before any sustained uptrend. 🔍 Fundamental Highlights (Q1 FY26): ✅ Profit Milestone: Reported ₹122.5 Cr consolidated net profit – first-ever since listing. ✅ YoY Turnaround: From ₹840 Cr loss (Q1 FY25) to profit; sequential recovery from ₹540 Cr loss (Q4 FY25). ✅ Revenue Surge: ₹1,917.5 Cr, up 28% YoY – led by higher GMV, merchant subscriptions & financial services. ✅ EBITDA Positive: ₹72 Cr, reversing past losses. Margin expansion driven by cost cuts. ✅ AI Adoption: Operational cost sharply lowered due to AI-based automation in backend processes. ✅ ESOP Compliance: CEO voluntarily cancelled 21 million ESOPs after SEBI concern, impacting reserves but strengthening governance. ✅ Brokerage Buzz: 🔹 Jefferies upgrades to ‘Buy’ – TP ₹1,250 🔹 Citi retains ‘Buy’ – TP raised to ₹1,215 🔹 Macquarie remains cautious but acknowledged “positive shift” 📈 Technical Breakdown (Daily Chart): 🔵 Price Action: – Hit new 52-week high at ₹1,089, then profit-booking from Overbought (OB) + Fair Value Gap (FVG) zone – Candle pattern shows rejection wick, hinting short-term exhaustion 🔵 Indicators: – CCI @163 – extremely overbought; reversal risk if cooling starts – TTM Squeeze – bullish momentum still strong but flattening – Ichimoku Cloud: Strong trend above cloud, but far from base = risk of mean reversion 🔵 Volume: – Surge in volume post-earnings – possible climactic top; need follow-up confirmation 🔵 Support Zones: – Minor: ₹1,003 – Medium: ₹974 – Strong base: ₹953–950 range 🧠 Strategy Thoughts: For positional traders: Avoid chasing highs. Wait for pullback to ₹1,003–974 for risk-managed entry. For existing investors: Hold with revised SL ₹950; trail if breaks out above ₹1,090 with volume confirmation.