Paytm's diverse source of monetisation to drive profits across segments, says JP Morgan

New Delhi [India], November 2 : Fintech solutions provider One 97 Communications, which operates the popular payment platform Paytm has built diverse sources of monetization across verticals -- payments, commerce and financial services -- in comparison to other competitors, multinational investment bank JP Morgan said in a report.
The report said that it gives the company the unique ability to drive monetization and profits across several segments at lower CAC (customer acquisition cost).
As India's fintech landscape continues to evolve, achieving strong monetization has become a challenge for most companies catering to this segment.
Paytm is expected to witness strong revenue growth across all its business segments led by device monetization in payments, financial services cross-selling, and rising ad monetization, among others.
According to the JP Morgan report that was put out on September 29, Paytm's revenues are expected to grow at over 40 per cent CAGR over FY22-26 to USD 2.8 billion.
"We see it retaining the highest revenue and profit levels among local vertical and global horizontal peers," the report said.
It pegged Paytm's share price target at Rs 1,000 by March 2023, against its current Rs 632.
On Paytm's loan business, JP Morgan sees a long runway for growth in the segment driven by the potential for growth in its MTU (monthly transacting users) and device merchant base, and increasing penetration among the user base.
Further, on funding winter in the fintech space, competitive intensity could moderate in the payments/digital lending space given the tightening of funding and regulatory hold in the sector
However, the report said Paytm is "well-funded" to drive expansion amid funding winter in the fintech space.