Positive Outlook for Paytm’s Parent Company: Dolat Capital’s Insights
Dolat Capital, a well-regarded research analyst firm, recently published a report concerning One 97 Communications Ltd, the parent company of the fintech platform Paytm. On September 30, the firm reaffirmed its “buy” rating on the stock while revising the target price to ₹920. This adjustment suggests a potential upside of approximately 26% from its current market price as of the close on Tuesday.
Investors React to Positive Projections
Upon the release of Dolat Capital’s findings, Paytm shares saw an impressive surge on October 1. The increase in investor enthusiasm can be attributed to Dolat Capital’s forecast, which highlighted a projected 37% upside based on the last recorded market price of ₹672.
Market Performance
| Date | Market Close Price (₹) | Change (%) |
|---|---|---|
| September 30 | 688.35 | – |
| October 1 | 731.25 | +6.23% |
Growth Potential in Digital Payments
Dolat Capital’s report emphasizes Paytm’s advantageous position within the rapidly expanding digital payments landscape in India. The firm holds a strong belief in the company’s capability to substantially enhance its revenue streams over the next decade. They predict that Paytm will start realizing steadily growing profits from the fiscal year 2026 onwards. The report posits that Discounted Cash Flow (DCF) valuation is the most suitable methodology for evaluating the long-term potential of the business.
Strategic Developments and Business Resilience
Moreover, Dolat Capital has characterized the company’s operations as “resilient” and “well poised” for robust growth. The renewed growth estimates are attributed to more favorable business dynamics, including the successful divestiture of its events business for ₹2,000 crore (₹20 billion). This strategic decision underscores the firm’s commitment to enhancing core operations.
Positive Business Changes
In the past three months, Paytm’s operations have witnessed significant improvements across various sectors. These changes include the successful migration of Paytm handles, resolution of regulatory obstacles, and the attainment of a Foreign Direct Investment (FDI) approval for the Payment Aggregator (PA) license. Furthermore, the firm reported stable market shares, supported by consistent consumer data related to Unified Payments Interface (UPI) and an expanding partner network in financial distribution.
Recovery Path for Paytm’s Brand
Dolat Capital noted that One 97 Communications Ltd is on a recovery trajectory from previous impacts experienced with Paytm Payments Bank Limited (PPBL) and the Postpaid services. The company boasts an extensive customer base, serving both essential and discretionary needs, with an impressive active user count of over 78 million Monthly Transaction Users (MTUs) and around 150 million Average Transaction Users (ATUs). This substantial user engagement indicates a strong foundation for future growth.
Investment Recommendation
With a reasserted ‘BUY’ rating and a revised target price of ₹920, Dolat Capital suggests that this investment portrays a promising value, implying EV/Sales multiples of 4.6x and 3.6x for FY26 and FY27, respectively.
Disclaimer: The insights and recommendations expressed in this article reflect the views of individual analysts and do not represent the views of the publication. It is advisable for investors to consult certified financial experts prior to making investment decisions.
