Buy One 97 Communications; target of Rs2300: Emkay Global Financial

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • Paytm's leading merchant network, with 16.4mn devices and ~52,000 on-ground sales staff, drives financial services growth.
  • Strong loan distribution, with over a dozen lending partners, and a long runway to grow distribution fees without putting Paytm's own capital at risk.
  • Consumer franchise regaining share, with six straight quarters of consumer payment share gains, and plans to win market share through product and features rather than cashback.
  • Operating leverage and UPI MDR upside, with expected EBITDA margin expansion to 19.5% by FY28E, and UPI MDR adding ~2.5bps to payment processing margin.

Thesis Validation Checklist

  • Watch for continued growth in financial services and marketing services revenue.
  • Monitor the expansion of EBITDA margin, driven by operating leverage and UPI MDR.
  • Track the growth of Paytm's consumer franchise, including MTU additions and cross-sell.
  • Observe the development of new initiatives, such as the AI-agent platform for small merchants and international expansion.