Paytm - Navigating Through The Storm: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.The recent regulatory restrictions have significantly impacted One 97 Communications Ltd.'s business environment and growth outlook. Despite the company's extensive reach, its ability to mitigate the business impact will largely depend on the execution capabilities over the coming quarters. We anticipate Paytm to experience a decline in market share within the overall payments market. We thus review our numbers and estimate payment processing margin to decline as the mix of high-yielding wallet business drops sharply, while the impact on financial business (loan origination volumes) further suppress revenue growth and profitability.  In terms of loan origination, we anticipate a weaker performance and cut our disbursements by 10%/40% for FY24E/FY25E, due to reputational damage and increased caution among lending partners. However, volumes are likely to recover from FY26E with an estimated growth cagr of ~25%. We remain watchful on the ongoing business transition and Paytm’s ability to recover lost business and resume growth trajectory over FY25-26E. We thus estimate FY25E revenue to decline by 24%, while contribution profit declines 30%. We estimate contribution margin to sustain at 51% over FY25E (versus 56% in FY24). We revise our target price to Rs 530 based on 15 times FY28E enterprise value/Ebitda discounted to FY26E. Our valuation corresponds to 2.8 times price/sales for FY26E. We will revisit our rating post Q4 results and in the interim maintain our Neutral stance on the stock..Click on the attachment to read the full report:.Aavas Financiers - Building Bricks In Place: Nirmal Bang.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Paytm - Navigating Through The Storm: Motilal Oswal

Cutting revenue, Ebitda estimates; remain watchful of recovery from H2 FY25E

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