Paytm Soars 10% Today : A Multibagger in the Making? Ventura Predicts 3x Return
Shares of One 97 Communications Ltd, the parent company of Paytm, surged 10% today as bullish sentiment continues to grow around the stock. Ventura Securities, a prominent domestic brokerage, has recently released an optimistic research note, predicting that Paytm could more than double its value over the next 24 months. In its bullish scenario, Ventura suggests that the stock could hit Rs 1,444, indicating a nearly 2.5X increase from current levels.
Key Highlights from Ventura’s Outlook:
- Revenue Growth: Ventura projects Paytm’s revenue to grow at a compound annual growth rate (CAGR) of 14.1%, reaching Rs 14,531 crore by FY27.
- Contribution Profit: The firm expects contribution profit to grow by 15.6% to Rs 8,301 crore over the same period.
- Pre-ESOP EBITDA: Ventura anticipates a significant rise in pre-ESOP EBITDA, with a projected growth rate of 54.5%, reaching Rs 1,829 crore by FY27.
- Stock Price Target: Ventura’s base case assumption targets Rs 1,170 per share, while its bullish scenario predicts Rs 1,444 per share. Even in a bearish scenario, the stock is seen reaching Rs 870, signaling strong confidence in Paytm’s future prospects.
Why Ventura is Bullish on Paytm:
- Expanding Core Services: Paytm’s strategic focus on enhancing its core payment services and expanding into financial services positions it well to capitalize on the growing digital economy in India.
- Robust Business Model: Despite challenges such as the Reserve Bank of India’s (RBI) stricture on its associate Paytm Payment Bank (PPBL), Ventura considers Paytm’s business model robust and its technology a gold standard in the industry.
- Strong Ecosystem: Paytm’s extensive ecosystem, comprising a pan-India merchant base of 40.7 million and 78 million monthly transacting users (MTUs), is expected to drive recurring revenue streams. The widespread adoption of UPI and Paytm’s soundbox and POS systems further strengthen its market position.
- Future Growth Drivers: Paytm’s Wallet, FASTag, BNPL, and house rental payments, which were temporarily discontinued due to RBI’s restrictions, are anticipated to resume once the regulatory hurdles are cleared. This resumption is expected to further bolster Paytm’s growth.
As Paytm continues to navigate the dynamic fintech landscape, its ability to adapt to regulatory changes, leverage cutting-edge technology, and maintain strong relationships with merchants and users will be crucial for sustained growth. With Ventura’s optimistic outlook, Paytm appears to be on track to becoming a multibagger stock, potentially delivering significant returns for investors.