The brokerage has cut Paytm’s FY21-26 revenue growth rate estimates from 26% to 23% compounded annually and has increased its losses per share estimate by 16-27% due to lower revenues and higher employee and software/cloud expenses.
The brokerage firm said Paytm’s payments business accounts for 70% of overall gross revenues and hence any regulations capping charges for digital payments could affect this. Paytm’s foray into insurance was recently rejected by the Insurance Regulatory and Development Authority, it added. This could also impact its prospects of getting a banking licence, Macquarie added.
It also pointed to recent high-level resignations. “Senior executives have been resigning from Paytm, which is a cause of concern and could impact business in our view if the current rate of attrition continues,” it said.
“Since November 18, Paytm’s stock price has fallen 40% against Sensex’s flat performance. Post the various business updates and results, we believe our revenue projection, particularly on the distribution side, is at risk and hence we pare down our revenue CAGR from 26% to 23% for FY21-26. We are roughly cutting revenue estimates for FY21-26E on an average by 10% every year due to lower distribution and commerce/cloud revenues offset partially by higher payment revenues,” the brokerage said.
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