Brokerages bullish on Paytm stock as company expands loan portfolio

Mumbai (Maharashtra) [India], December 7 : Paytm has garnered positive ratings from major brokerage firms following its recent announcement to expand its business into offering higher ticket personal and merchant loans.
Brokerages, including Bank of America (BofA), JM Financial Services, Jefferies, Motilal Oswal Financial Services, and Dolat, have maintained a 'buy' rating on Paytm stock, expressing confidence in the company's strategic moves.
BofA remains bullish on Paytm, issuing a 'buy' rating and setting a target price of Rs 1,165 per share.
The brokerage firm sees the structural story of high take-rate lending and subscription-based soundbox revenue as intact. Paytm's foray into higher ticket personal and merchant loans, particularly targeting lower-risk and high-credit-worthy customers in collaboration with large banks and NBFCs, aligns with BofA's positive outlook.
Motilal Oswal acknowledges Paytm's steady asset quality metrics and anticipates growth in the medium term, driven by the pick-up in high-ticket personal loans and merchant loans.
The brokerage firm believes that an increased number of lending partners will contribute to the company's steady growth.
While Morgan Stanley maintains an 'equal-weight' rating on Paytm stock, it expresses positivity regarding the company's strong asset quality and demand for high-ticket loans.
The brokerage firm emphasizes the potential of Paytm's new lending partnerships to expand its loan portfolio, mitigating potential revenue loss from the postpaid lending business slowdown.
Dolat remains optimistic about Paytm's prospects, emphasizing the company's commitment to portfolio quality and the continuous addition of new partners. Dolat maintains a 'buy' rating on Paytm stock with a target price of Rs 1,320.
Following Paytm's management commentary on plans to broaden its credit distribution business with a focus on higher ticket loans, Bernstein maintains an 'outperform' rating on the stock.
Paytm's emphasis on meeting the demand for higher-ticket, low-risk personal and merchant loans aligns with Bernstein's positive outlook.
Paytm's strategic move into the higher ticket loan segment reflects its responsiveness to market demands and a commitment to diversifying its offerings.
The positive ratings from leading brokerages signal confidence in Paytm's ability to navigate and capitalize on evolving financial landscapes.