Paytm Research Tear Sheet

Stock Data

Ticker: PAYTM

Exchange : NSE and BSE

Industry: Financial technology E-commerce

Price Performance

Last 7 days    12.17%

YTD                 -37.44%

Last 12 months     0.00%

The stock of Paytm has underperformed by falling 34% in the last six months. Paytm made its debut in the share market on 18th November 2021. The issue price was   Rs 2,150 per share. On the listing day, it hit a record high of Rs 1,961.05. The stock traded at its highest level since March 11, 2022 but it has failed to touch its issue price since listing.

The word Paytm means pay through mobile. It is an Indian multinational company which is specializesindigital payment systems, e-commerce and finance. The company is headquartered in Noida, UttarPradesh. It wasincorporated in August 2010. The founder is Vijay Shekhar Sharma. The services include payment system, mobile payments and online shopping. The stocks of Paytm are traded on the NSE & BSE.In the online payment industry, Paytm has come out with flying colors. To survive in this industry the company has made itself available in 11 languages. It has made itself available in wide array which includes movies, utility bill payments, travel booking, mobile recharges.  Paytm QR code is used for instore payments such as restaurants, parking, tolls and grocery stores. Even educational institutions and pharmaciesare taking payment through Paytm QR codes.The vision of the company is to “enhance digital excellence, increase earnings growth, and cross-selling opportunities”.

Shareholding Pattern in Percentage

Service Line- Paytm providesthe following services. Paytm for consumer and Paytm for business. The consumers can pay their bills like Electricity & Water and recharge their mobile using Paytm. The customers are even rewarded with hottest deals, cashbacks & offers.The Paytm App helps to transfer funds in a secure manner. It is even used for online payment and instore payments. The customers can book train tickets, bus tickets and flight tickets with the paytm app.It provides financial services for its customers which include opening savings accounts through paym app. Loan and credit card payments can also be done through paytm app. It is also used for business. The customers can access  both online/offline channel for payment. It is even used by businesses for business payments & financial services.

Financial Highlights

In Rs Crores	Jun-22	Jun-21
Revenue from Operations	1,680	891
Total Direct Expenses	954	646
Contribution Profit	726	245

For Q1 FY 2023 revenue grew 89% YoY and 9% QoQ. Payments revenue grew 69% YoY (3% QoQ). Revenue in Financial Services improved 4x YoY and 61% QoQ. Payments Services to Consumers stood at Rs 519 crores. It increased 73% Y-O-Y.Payments Services to Merchants stood at Rs 557 crores. It increased by 67% Y-O-Y. Financial Services & Others stood at Rs 271 Crores, increased by 393%Y-O-Y. Commerce and Cloud Services to Merchants stood at Rs 331 Crores, increased by 64% Y-O-Y. PaytmPostpaid grew 29% QoQ, disbursement stood at Rs3, 383 Crores,inceased55% QoQ. Personal loans grew 44% QoQ and disbursements amounting to ₹1,344 Crores, increased 67% QoQ.Merchant Loans grew 56% QoQ. Total disbursement amounted to disbursements of ₹827 Cr for the quarter, increased 46% QoQ.

Industry Analysis- The Indian payment industry is expected to triple by 2026. At present it is 3 trillion. The reason for such growth is digital payments. In the last 5 years there has been a phenomenal growth in digital payments. It is expected that 65% transactions will be done digitally by 2026. The UPI payments are set to increase from 35% to 75% in next 5 years. The reason for this growth are leading global and Indian fintech players. Large QR-code based merchant acceptance network, user-friendly interfaces has further helped in the development.

Strength:Paytm has a brand reputation in India.It is widely accepted by all the merchants in India.The company provides cashback options to its customers.Paytm was the first online payment company which set up its operations in India. Paytm Wallet enjoys a strong relationship with its suppliers and other members of the supply chain. It has a diversified product portfolio.

Weakness:Paytm has been criticized several times for its customer service.The population of India is less tech savvy regarding online payments.People in India prefer cash over online payment.

Opportunities:Offers banking service along with online payments.It can create awareness among the Indian population for its usage.Paytm Wallet can infuse artificial intelligence to predict consumer demand better. It should concentrate to expand further in adjacent markets and industries. It should even try to focus on the international markets.

Threats: Security & Privacy is a concern for its customers. Entry of new online payment services like Mobiwik, Vodafone &Airtel is a major threat for this company. Paytm Wallet can be affected due to the fast changing government regulations.

Peer Analysis

Company Name	MCap(Cr)	TTM PE	P/B	ROE(%)
One 97 Paytm	54,177.89		8.2	-16.95
FSN E-Co Nykaa	67,165.30	722.55	113.2	6.67
IRCTC	52,680.00	79.34	27.96	35.22

From the investor perspective the IRCTC will be in a better position due to high ROE and  One 97 Paytm will be least  preferred as it is giving negative return.