Paytm’s share price has surged up over 70% on a year-to-date basis. Analysts at Bernstein see the stock surging further as they think that the payments giant has a head start in the lending business.

The Paytm Analyst: A Pranav Gundlapalle-led analyst team at Bernstein initiated coverage on Paytm with a buy rating and a price target of ₹1,108. The target indicated an around 20% upside from the stock’s last closing price of ₹904.75.

The Paytm Thesis: In their latest research note, analysts noted that the Indian payment landscape is ongoing a transformation driven by digital payments. As per the analysts, debit cards have already been significantly impacted by the emergence of cost-free UPI (unified payments interface) transactions. Moreover, the process of disrupting credit cards is currently in motion.

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The firm highlighted that Paytm’s early signs of an edge in digital lending, achieved by leveraging its dominant digital payments platform, put it on the right side of this disruption.

The analysts expect the Vijay Shekhar Sharma-led internet giant to continue its strong growth in the lending business. “Simultaneously, a rise in payments volume (even as the payment margins decline marginally) will ensure that the business turns profitable in FY25E and achieves an EPS of ₹130 by FY30E,” the analysts further added.

Price Action: Paytm’s share price was up 0.62% to trade at ₹910.40 in the late hours of trading on Thursday.

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