Macquarie analyst says Paytm's lending portfolio quality stands 'rock solid', growth exceeds expectations

 

Macquarie’s channel checks with some of Paytm's largest lending partners revealed that the performance of the company’s Postpaid loans and personal loans continues to be pretty robust. 

By timetostand | 

India’s leading digital payments and financial services firm Paytm’s loan distribution business is proving to be the biggest driver of profitability for the company.

Paytm’s lending products, Paytm Postpaid, Personal loans and Merchant Loans, are underwritten by the fintech giant’s lending partners, with Paytm acting as the collection outsourcing partner. Its data-backed focus on credit quality has kept the asset quality under check resulting in efficient collections, growth, and revenue. 

The portfolio quality was a large factor considered by global brokerage firm Macquarie when it recently double-upgraded Paytm’s stock to 'outperform' from 'underperform' and raised the target price by 80% from ₹450 to ₹800.

Macquarie’s channel checks with some of Paytm's largest lending partners revealed that the performance of the company’s Postpaid loans and personal loans continues to be pretty robust. “The company has now seen several repeat purchases/transactions over the past 12 months, which assures us of the quality of these loans,” it said in a note.  

Edited by - timetostand