Paytm Shares Hit 20% Drop: UPI Struggles and Market Volatility Weigh on Stock
Paytm’s stock has taken a significant hit today, falling as much as 5.6% on the BSE, with the share price touching an intraday low of Rs 843.5 per share. The decline is part of a broader downward trend, as the stock has dropped 14.13% this week alone. From its 52-week high of Rs 1,063 reached in mid-December 2024, Paytm’s share price has plunged by 20.6%, officially entering the ‘bear zone’—a situation where a stock declines by 20% or more from its recent peak.
While the Sensex and Nifty indices remained relatively flat as of 1:30 PM, Paytm’s struggles are becoming more evident. The stock’s performance this week contrasts with the broader market’s 2.6% dip.
Paytm’s UPI Struggles and Market Share Erosion
One of the key factors impacting Paytm’s stock price is its declining performance in the UPI transactions space. According to the latest data from the National Payments Corporation of India (NPCI), Paytm’s UPI transaction volume in December 2024 stood at 1.15 billion, with a total value of Rs 1.25 trillion. This figure is significantly lower than competitors like PhonePe and Google Pay. In comparison, PhonePe processed 7.98 billion transactions worth Rs 11.76 trillion, while Google Pay’s volume stood at 6.1 billion transactions, valued at Rs 8.22 trillion.
As of December 2024, Paytm held a market share of just 6.87% in transaction volume, far behind PhonePe’s 47.7% and Google Pay’s 36.7%. The flat performance in UPI transaction volumes over recent months—ranging from 1 to 1.16 billion—signals a stagnation in Paytm’s growth, while PhonePe and Google Pay continue to see upward momentum.
Paytm’s Q3 Earnings and Upcoming Report
Paytm is scheduled to announce its Q3 results on January 20, 2025. The company posted a net profit of Rs 930 crore for Q2 of the current financial year, a turnaround from the net loss of Rs 290.5 crore reported in the same quarter last year. However, the profit was partially boosted by the sale of its entertainment and ticketing business to Zomato. Revenue for the quarter, however, declined by 34% year-on-year, falling to Rs 1,660 crore.
Technical Analysis and Price Outlook
On the technical front, Paytm’s share price has broken below the lower end of the Bollinger band on the daily chart, which was at Rs 885.2. This suggests further downside potential, with the next key support level at Rs 802 (its 20-week moving average), followed by Rs 785.35 (100-day moving average). If the price continues to fall, the 200-day moving average at Rs 599.8 could be the next target.
Momentum indicators such as the MACD and Slow Stochastic are showing negative signals, indicating persistent weakness in the stock. The RSI is nearing oversold territory, which may trigger a potential bounce-back. If this occurs, resistance levels are seen at Rs 885, Rs 905 (50-DMA), and Rs 975 (20-DMA).
As Paytm faces increasing pressure from competitors and market conditions, its stock may continue to struggle unless there is a significant shift in its business performance and market position.
