Investment firm Mirae Asset Capital Markets just boosted its outlook on Paytm, the digital payments giant behind One97 Communications. They now recommend buying the stock with a target price of Rs 1,340, which could mean a 19% gain from where it trades today.
What’s driving this optimism? Paytm keeps gaining ground in UPI transactions, the popular instant payment system in India. They’ve relaunched their Postpaid service right on UPI, teaming up with Suryoday Small Finance Bank. This lets users borrow up to Rs 10,000 interest-free for 30 days, all seamless within the app. Mirae figures this move could pump up Paytm’s earnings by about 6% by fiscal year 2027.
Paytm’s buy-now-pay-later (BNPL) options have a proven track record. In just 10 to 11 quarters, they handled more than half of the company’s total loans. Sure, profits from this new UPI credit line start slimmer, but experts expect them to grow as more people use it and additional banks jump in.
On the UPI front, Paytm’s market share climbed to 7% by transaction volume and 5.8% by value over the past two months. That’s even as their biggest competitor slips. And get this—they did it without pouring money into heavy ads, showing off a smart, efficient business.
Paytm boasts a huge network too: 74 million users who transact every month and 45 million registered merchants. This setup opens doors for fresh revenue in payments, loans, and services for sellers.
The company’s also tightening costs, spending wisely on marketing, and using AI to boost efficiency. All that should help turn things around. Mirae predicts Paytm could hit 15% EBITDA margins by fiscal 2028, a big leap from the negative 21.8% expected this year.
“We stay bullish on Paytm thanks to new income streams, solid growth factors, and that massive merchant network,” Mirae noted. With the stock dipping lately, it might be a smart time for investors to buy in.
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