ICICI Securities research report on One 97 Communications
Our positive stance on One 97 Communications (PAYTM) remains intact on the back of its significant earnings growth potential, stemming from: 1) likely growth in payments and loan distribution; 2) margin expansion prospects from a combination of product upgrades, improving UPI mix towards chargeable products, savings initiatives and operating leverage; and 3) presence of optionality through possible offerings, including traction in postpaid/wallet/international complemented by its diverse presence across the payment ecosystem. Given these levers, we consider risk-reward as favourable. There is also better success now in terms of product innovations, customer/merchant retention and free cash flow maximisation. Regulatory challenges, including its impact on loan growth, remain key risks.
Outlook
We now value PAYTM basis 40x multiple as we roll forward to FY28E EBITDA of INR 21.5bn. We add cash of ~INR 130bn and arrive at a TP of INR 1,450 (earlier INR 1,240) basis diluted shares of 67.8mn. Maintain BUY.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
