The report said it gives the company the unique opportunity to generate revenue and profit in various segments at lower CAC (customer acquisition costs).
As India’s fintech landscape continues to evolve, achieving strong revenues has become a challenge for most companies engaged in this segment.
Paytm is expected to see strong revenue growth across all of its business segments, including from device monetization in payments, cross-selling financial services and increasing revenue from advertising.
According to the JP Morgan report released on September 29, Paytm’s revenue is expected to grow at more than a 40 percent CAGR over FY22-26 to USD 2.8 billion.
“We see it maintain the highest levels of revenue and profit among local vertical and global horizontal counterparts,” the report said.
It set Paytm’s price target at Rs 1,000 in March 2023, against the current Rs 632.
Turning to Paytm’s lending business, JP Morgan sees a long runway for growth in the segment driven by the growth potential of its MTU (monthly transaction users) and device vendors, and increasing penetration among its user base.
Furthermore, during the financing winter in the fintech space, competition intensity could decrease in the payments/digital lending space, given tighter funding and regulatory power in the sector
However, the report said that Paytm is “well-funded” to fuel expansion during the financing winter in the fintech space. (ANI)