CITI on One 97 Comm ; Buy, TP Rs 1940

2Q EBITDA/EBIT was +4%/+1% vs Citi at Rs2.7bn/Rs1.2bn. Net payment margins rose 0.5bps QoQ to 9bps (CitiE: +0.3bps QoQ). Financial services revenue growth accelerated to 49% YoY (45% YoY in 1Q; CitiE: 44% YoY). Management guided to +2.5bps net payment margin impact from UPI-MDR (Rs9bn in FY28E – along expected lines) & expects DLG mix in merchant-lending business to rise in near term (negative impact on near-term CM margins). Paytm is seeing growth acceleration in financial services and improvement in net payment margins even ex-UPI It is also upping investments in tech (AI), marketing and distribution (MTU acquisition, on-ground sales-fleet).

ONE 97 COMMUNICATIONS LTD

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