'Buy' Paytm Shares Maintains ICICI Securities, Hikes Target Price — Here's Why

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ICICI Securities Report

Our positive stance on One 97 Communications Ltd. 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 for Paytm shares.

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