Investec backs Paytm’s digital ‘toll road’, sees 23% upside despite 15% fall. Key reasons here
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After a 15% weekly decline and three months of consolidation, One 97 Communications is positioning itself for the next leg of a rally that could take the stock to Rs 1,550, implying a potential upside of 23%, Investec said as it initiated coverage with a ‘Buy’ rating. The brokerage’s bullish view on the Paytm parent is driven by three key triggers, led by India’s rapidly expanding digital payments ecosystem, where the fintech operates like a “toll road”. Strong merchant leadership and rising operating leverage are expected to provide sustained tailwinds to the stock, Investec added. Here are three reasons: 1) Digital payments as a toll roadPaytm’s core payment processing business functions like a toll road on India’s rapidly expanding digital payments ecosystem, earning a small fee on every transaction routed through its platform, Investec said. The brokerage expects payment gross merchandise value (GMV) to grow at a 25% CAGR over FY25–28...