Why are brokerages bullish on Paytm?

Brokerage firm, Motilal Oswal, has gone highly bullish on Paytm. The brokerage has given it a price target of Rs 865 which means an upside of 31 per cent from current levels. On Thursday, Paytm’s stock closed at Rs 656 per share.

Reason why Motilal Oswal is bullish on Paytm

Motilal Oswal finds Paytm at a sweet spot amidst the ecosystem of rising digital payments in the country. The brokerage expects digital payments industry to double to $16 trillion in next three years. It expects Mobile payments to augment five-fold to $3 trillion in as many years. Now, here is where, the brokerage firm thinks Paytm stands to benefit. It has not been hidden from anybody, that, a bulk of digital payments is done by scanning of QR Code in the country. With a flourish of digital payments, scanning of QR Code is expected to gain traction thick and fast. Paytm has deployed 68 lakh payment devices with merchants. It has a monthly transacting users of 9 crore by end of financial year 2022-23.

Paytm has already turned net EBITDA positive. Goldman Sachs has also said that Paytm’s adjusted EBITDA and loan disbursal will only flourish in time to come.

In the calendar year 2023, there has been a 26% increase in the stock of Paytm so far. In the last one month, there has been a rapid increase of 18% in the shares of One97 Communications.

The shares of Paytm were listed on the domestic market on November 18, 2021. These were allotted to its IPO investors at a price of Rs 2150, but shares haven’t reached this price yet. Paytm’s shares are currently trading at a price of Rs. 651.35