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One 97 Communications Ltd. has built a formidable payment business with large customer and merchant bases and market-leading infrastructure, according to UBS Research.
The research firm has initiated a ‘buy’ rating on the Paytm parent’s stock with a target price of Rs 900, implying a potential upside of 24.48%.
UBS forecasted that the fintech company would break even on Ebitda in the next financial year and reach a 20% Ebitda margin by fiscal 2027–28, according to a note on Monday. “We view this as a key re-rating trigger, as seen at other new-age companies, such as Zomato, where investors value profitable growth more than pure growth.”
It expects a moderating topline of a 21% compound annual growth rate in fiscal 2024–28, while operating leverage plays out as marketing-expense requirements ease and the costs of employee stock ownership plans moderate.
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