New Delhi, Oct. 17 -- Paytm's growth prospects have come into focus after global brokerage Nomura initiated coverage on the digital payments company with a Buy recommendation and a target price of Rs.2,250. The target implies a potential upside of 33% from the last closing price, even after the stock's nearly 50% rally over the past six months.

Nomura's bullish outlook rests on several factors, including growth in digital payments, deeper penetration of merchant lending, an improving cost structure and potential revenue from UPI merchant discount rates (MDR). The brokerage also sees opportunities in international expansion and enterprise artificial intelligence (AI), which could add to Paytm's longer-term growth prospects.

Nomura expect...