Analyst Pranav Gundlapalle predicts an optimistic outlook for Paytm

Pranav Gundlapalle, a Senior Research Analyst at Sanford C Bernstein, offers a positive forecast for both Paytm and its associate, Paytm Payments Bank Ltd (PPBL).

In an interview, Gundlapalle shares insightful observations on Paytm’s enduring strength and strategic agility, spotlighting key opportunities for expansion and steadiness within the financial technology giant’s activities.

Gundlapalle identifies the continuity of Paytm’s UPI operations as a pivotal factor in the company’s potential stock upswing. With UPI payments accounting for 70% of Paytm’s payment volumes, the assurance that these operations will continue unimpacted forms the foundation of Gundlapalle’s positive outlook.

This confidence is rooted in the regulatory advice to the National Payments Corporation of India (NPCI) to consider Paytm’s request to become a Third-Party Application Provider (TPAP) for UPI channels, a move that ensures the fintech major’s operational stability and growth prospects.

The strategic decision by Paytm’s founder and CEO, Vijay Shekhar Sharma, to step down from the board of PPBL is seen by Gundlapalle as a deliberate move to delineate and distance Paytm from PPBL. He views this as a positive development, signaling a proactive approach to address and contain issues within PPBL while safeguarding Paytm’s broader business interests and market position.

Furthermore, Gundlapalle highlights the significance of Paytm’s search for new banking partnerships following the reevaluation of its relationship with PPBL.

This strategic pivot is likened to adaptive moves by competitors in similar situations, demonstrating Paytm’s agility in ensuring the continuity and reliability of its UPI transaction processing. The move to diversify banking partnerships not only mitigates risks but also positions Paytm for sustained operational efficiency and growth.

Contrary to apprehensions about potential disruptions, Gundlapalle is optimistic about the recovery and stability of these aspects of Paytm’s operations. He points out that the attrition among Paytm’s merchant partners is minimal, indicating strong and resilient business relationships