Thereby, on valuation, Citi said, "We value Paytm on SoTP basis, assigning different multiples to the three key verticals. Paytm's key edge is its first-mover advantage on both sides of the payments ecosystem (71 million MTUs and 25 million merchants) which gives it a solid customer acquisition engine for new services – commerce, financial, or payments."Īccording to Citi, Paytm's stock has declined materially from its IPO price of Rs2,150/sh, partly in line with the fintech sector de-rating YTD, compounded by concerns on profitability in the core payments business and regulatory headwinds in India."Ĭiti believes that Paytm stock's valuations are attractive and are pricing in most of the downside risks. We think Paytm has several existing and emerging levers to drive long-term platform stickiness (BNPL, Devices, etc.) and improve overall profitability (Financial Services) in the business. "we rate One 97 Communications (Paytm) as Buy. The top 3 players’ market shares are steady at c95%.įollowing this, giving an investment strategy, Citi's note said. In overall UPI and also including Peer-to-Peer (P2P) payments, Citi's note added that Paytm’s market share stood at 11% in Feb’23 (+60bps YoY +10bps vs 3QFY23 avg) whereas Paytm’s market share in overall digital payments to merchants (including other instruments like credit cards etc.) stood at c24%. Among other instruments, credit cards continue to see healthy growth (40%+ YoY across online and offline), although market share continues to shift towards UPI overall." Payment GMVs rose 39% YoY (MTUs: 85 million flat MoM) and Paytm’s market shares in total UPI payments and digital merchant payments remained largely steady at 11% and 24%, respectively."įurther, based on RBI's payment statistics (Jan’23), Citi's report said, "we estimate the share of UPI in Merchant Digital Payments at c59% in Jan’23 (vs. In its research report, Citi said, "Paytm’s Feb’23 operating metrics indicate sustained momentum in loan disbursals (+6% MoM by value) and device deployment (+0.3 million). In its monthly performance report, Paytm stated that while it continues to witness accelerated growth with total disbursements through its platform, their payments consumer and merchant base offers a large addressable market, thereby providing a long runway for growth.
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