Brokerage firm Citi expects Paytm aka One97 Communications shares to possibly hit double-figure returns as the fintech giant continues to see robust growth in monthly transacting users.
What Happened? The global brokerage threw out a ‘buy’ rating for Paytm stock for a price target of ₹1,061. Citi believes that the fintech players’ valuations look attractive at the current market price owing to several existing and emerging levers that are likely to drive price action.
Citi Group’s optimism arrives on the back of Paytm announcing its business operating performance for the two months that ended February 2023 on Monday. The mobile payments company showed an impressive 28% growth in average Monthly Transacting Users (MTU) on the Paytm Super App for the two months at 89 million.
The company said it is seeing consistent growth in merchant payments volume with the total merchant Gross Merchandise Value (GMV) processed through the platform for the two months ended February 2023 aggregating to ₹2,33,060 crore, marking a year-on-year growth of 41%.
See Also: Zomato Shares Regain Momentum As Credit Suisse Sees Potential Growth Spurt
Paytm’s leadership in offline payments strengthened further with 6.4 million merchants now paying subscriptions for payment devices, an increase of 0.3 million in the month of February.
The company’s loan distribution business has also continued to witness accelerated growth with disbursements through the platform for the two months that ended February 2023 growing 286% year-on-year to ₹8,086 crore.
The number of loans disbursed in the two months surged 94% to 7.9 million loans.
Paytm said it continues to work with its lending partners to remain focused on the quality of the book, adding its payments consumer and merchant base offers a large addressable market.
Price Action: Paytm shares were trading 2.11% higher at ₹593 shortly after markets opened for trading on Tuesday.
Read Next: Nykaa Shares Crash As This Broker Gives ‘Underweight’ Rating
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.