Paytm s continued monetisation, improved profitability dynamics and discounted valuations as compared to global and Indian peers makes UBS bullish over the online payments aggregator.
“A steady ROA expansion has happened in the last four-five years due to the factors which you just mentioned. We feel that we are probably closer to that expansion, like the peak of expansion and now we should start seeing some contraction due to NIMs stagnating or declining and credit cost already bottoming. Now, we would only see some increases in credit cost towards the average.”
“The pick-up in capex spending will likely become more broad-based. While public capex will likely stabilise on stretched government finances, we expect private corporate capex and residential housing demand to continue to improve,” said Tanvee Gupta Jain, chief India economist, UBS Securities.
According to Swiss brokerage UBS Securities, increasing default risks in retail unsecured loans of banks is likely to push up their credit losses by 50-200 bps.