Bernstein names Paytm as top fintech pick with target price of Rs 2,200
Investment bank Bernstein identified Paytm as its leading financial stock, citing strong merchant lending growth and potential UPI changes as key earnings drivers.
Shares of One 97 Communications rallied up to Rs 1,804 after international brokerage Bernstein named the company's fintech arm Paytm its top pick. The analyst group cited robust merchant lending growth, operating leverage, and the potential introduction of mobile discount rates on UPI as primary drivers for future earnings. Bernstein set a target price of Rs 2,200, suggesting upside potential of up to 26% from current market levels. Forecasts estimate Paytm's earnings per share at Rs 78 by fiscal year 2029. Even without accounting for MDR on UPI impacts, the forecast remains at Rs 54 compared to a consensus of Rs 46.
Jefferies also highlighted five Indian financial companies, including Paytm and Groww, that can achieve a compound annual growth rate of 25% over three years. While Jefferies maintained a price target of Rs 2,100 for Paytm with a buy call, Bernstein's higher valuation reflects differing perspectives on the company's monetization strategy and operational scaling.
