Shares in India's Paytm are among the worst performing globally ahead of an earnings report that's expected to show widening losses at the troubled payments platform.
The stock is down about 61 per cent over the past six months, the second-worst drop over that period in Bloomberg's World Index, which tracks large and mid-cap firms globally. It's also bottom in the Nifty 500 index.
The decline comes after India's central bank ordered Paytm's banking affiliate to halt much of its business in January, dealing a major blow to the fintech pioneer and sparking a sharp selloff in its shares. The Reserve Bank of India told Paytm Payments Bank Ltd. to wind up all banking activities by March 15.
read more
- India agency seeks overseas transaction details from Paytm Payments Bank, sources say
- Paytm crisis will shake up India’s wider fintech sector too
- Negotiations on at acquiring Paytm Payments Bank businesses as RBI deadline looms
- India's Paytm banking unit to cut about 20% of staff as business halt looms: sources
Both Paytm and Paytm Payments Bank are part of billionaire Vijay Shekhar Sharma's fintech empire, but the bank isn't controlled by the publicly traded mobile wallet company.
One 97 Communications Ltd., the parent of Paytm, is expected to see losses widen Wednesday in its first earnings release since the restrictions were announced.
The fourth-quarter net loss is expected to widen to 4.6 billion rupees ($55 million) from 1.7 billion rupees a year earlier, according to data compiled by Bloomberg. Revenues are expected to be little changed at 23.4 billion rupees.
Of the 16 analyst recommendations on Bloomberg, seven suggest selling the stock while the remaining nine have a buy or hold call. The average 12-month price target is 468 rupees, 30 per cent higher than the current price level.
Emkay Global's analyst Anand Dama expects a further 16 per cent correction, arguing that the fourth quarter results "won't capture the full extent of business disruptions caused due to the drop in UPI and bill payment market share."
The fintech empire founded by Sharma has seen several top executives depart in the aftermath of the RBI crackdown, including Surinder Chawla, chief executive of its banking unit, and Bhavesh Gupta, formerly Paytm's COO and President.
