Paytm Continues To Do Well In Merchant Device Deployment, UPI; Analyst Says Valuation Looks Attractive, Growth Will Be Sharper

Paytm recently announced its plans to strengthen its lending business to offer higher ticket personal and merchant loans, targeting lower risk and high credit worthy customers, in partnership with large banks and NBFCs. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services shared his insights on National TV channel and said that there was some exaggeration on the downside in the reaction to Paytm's share price as stock market reacts sharply on fear and greed. He is positive on overall business, and finds Paytm's valuation attractive.

The price target for Paytm has been pegged at Rs 1,025 apiece. Moreover, the analyst at the domestic brokerage firm is positive on Paytm, as according to him the fintech giant continues to do well in the rest of the business such as merchant device deployment, loan disbursement and other segments, and UPI transactions. He expects 'growth in Paytm will only be sharper from here'.  

"Stock market was very optimistic on the good growth that Paytm has been showcasing, especially on the loan disbursement in the past quarter," Khemka added. He further said that "It's a good correction for Paytm, for some other NBFCs'.

In an update and outlook on the loan distribution business, Paytm announced that it will further expand its business to offer higher ticket personal and merchant loans, which would be targeted at lower risk and high credit worthy customers, in partnership with large banks and NBFCs.

In an analysts call, Paytm management said that a good demand has been seen in higher ticket (Rs 3-7 lacs) low-risk personal and merchant loans. “We are expanding on high ticket loans. Both merchant and personal, are in existence for three years. There is a large demand for new loans without delinquency where customers and merchants are seeking higher amounts of loan at low interest rates,” it said.