** 44% downside possible in Paytm **
Paytm's business model lacks focus and direction, the company a 'cash guzzler'.
Paytm's valuation, at 26 times FY23 price to sales (P/S), is expensive especially when profitability remains elusive for a long time. Most fintech players globally trade around 0.3-0.5 times PSG (price to sales growth ratio) and we have assumed the upper end of this band. We are unwilling to give it a premium here as we are unsure about the path to profitability. Key risks include change in regulations which allow monetisation of UPI and receipt of a banking license.
Jai Hind.
Disclaimer:
This video is only for educational purposes. Please consult your financial advisor before you take any trades. I am not a SEBI Registered Analyst.
Paytm's valuation, at 26 times FY23 price to sales (P/S), is expensive especially when profitability remains elusive for a long time. Most fintech players globally trade around 0.3-0.5 times PSG (price to sales growth ratio) and we have assumed the upper end of this band. We are unwilling to give it a premium here as we are unsure about the path to profitability. Key risks include change in regulations which allow monetisation of UPI and receipt of a banking license.
Jai Hind.
Disclaimer:
This video is only for educational purposes. Please consult your financial advisor before you take any trades. I am not a SEBI Registered Analyst.
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