New Delhi October 14
Domestic Institutions led by mutual funds have raised their stake in the Indian mobile payments company Paytm. Latest shareholding pattern filed by the company on the exchanges shows that mutual funds have increased their stake in the company by 1 per cent.
Domestic mutual funds company Mirae Asset and Nippon Mutual Funds have expanded their stake in the company to 4.49 per cent and 2.27 per cent respectively.
Dolat Capital says NPCI data for June - August suggests a stable UPI share, resilient merchant base and growing partners for the company. The firm mentioned in its report, "Paytm remains in a bright spot of continued rapid growth in digital payments in India. We believe that the company has potential for growing its revenues multi-fold over next decade and is expected to deliver steadily growing profits FY26E onwards."
Emkay Global another firm predicts strong growth and profitability for the company. The brokerage noted that the fintech company is on track to achieve annual revenues of approximately Rs 100bn by FY28, resulting in a surplus of Rs 25-30bn over its operating costs.
Another brokerage Ventura recently initiated coverage on Paytm with a target price of Rs 1,170 over 24 months. Analysts at the firm said that despite RBI stricture on associate Paytm Payment Bank (PPBL), they believe that Paytm's business model is robust.
"With UPI emerging as the favoured digital payments medium and Paytm originated soundbox (+POS) becoming an essential toolkit for payments, Paytm is well placed to benefit from the tailwind associated with this." said the report
The report further adds Paytm's ability to adapt to regulatory changes, leverage technology, and maintain strong relationships with merchants and MTUs will be crucial to its sustained growth.
"With a clear focus on enhancing its core payment services and expanding into financial services, Paytm is well-positioned to capitalize on the growing digital economy," said the report.
In Q1 FY25, Paytm reported operating revenue of Rs 1,502 crore, and a balance sheet with Rs 8,108 Cr of cash on books. The company had then said, "Going forward, we expect revenue and profitability to improve, driven by growth in operating parameters such as GMV, an expanding merchant base, recovery in loan distribution business and continued focus on cost optimization."
Paytm says it will remain focussed on its core payments and financial services business.