According to a report published by the international brokerage firm on November 28, CLSA has changed its recommendation for the shares of payment services provider Paytm from "sell" to "buy."
Risk-reward is now "favourable" due to the recent price fall, according to CLSA, which also noted that the business has more than $1 billion in cash on hand.
The company stated that the stock "warrants a look now, even though our discussions with various investors over the previous four months imply some discomfort or uncertainty about scaling up the lending business."
According to the brokerage, Paytm's cash burn should be finished in "another 4-6 quarters." Although the net take-rate "has increased by 13 bps," fixed cost absorption is still crucial, it was stated.
Following consideration of the aforementioned elements, CLSA declared that it has chosen to "upgrade (Paytm) to buy from sell with a TP (take profit) of Rs 650."
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