Paytm rises as Citi bets on faster customer growth versus rival PayU

The shares of Paytm rose over 5 percent to Rs 464.80 on the BSE on November 25 (Friday) after Citi Research, in its note, said it sees Paytm gaining higher market share in digital payments and hitting faster growth in active customer base in the BNPL segment vis-à-vis its rival PayU.

The research house has a 'buy' rating on the Paytm stock with a target price of Rs 1,055.

"Paytm has gained market share in digital payments vs PayU, although the growth appears comparable on MDR (merchant discounting rate-generating TPV (total payment value) basis at 59 percent YoY for PayU vs 52 percent YoY (Paytm) for January-June 2022. In the BNPL segment, Paytm is seeing faster growth in active customer base vs PayU’s Lazypay. Lazypay’s reported loss rate has increased year to date to 3.1 percent (+30bps versus calendar year 2021) – something to watch out, for the broader BNPL space in India (Paytm has reported stable asset performance across its lending partners’ portfolio with loss rates at 1.1-1.3 percent for the postpaid BNPL product)," the brokerage said in a research note on November 23, 2022.

Also read | PayU India's revenue grew by 38% in the first half of FY23