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Indian digital businesses are witnessing rapid growth, aided by stronger adoption of online services in diverse segments, especially in the fintech landscape. In view of this development, Dipan Mehta, Director, Elixir Equities, recently said in an interview to a publication that he believes that the next set of multibagger stocks will come from digital businesses.

Elaborating on the subject, Mehra said the next set of multibaggers will come from concept stocks rather than mature businesses. He defined concept stocks as the ones where companies are doing something differently with a huge market and can be scaled up at a very low cost.

He added that a lot of digital businesses fit this criteria, which is why he is bullish on stocks of companies like Paytm, India's leading digital payments and financial services company, and the pioneer of mobile and QR payments.

For Paytm, Mehta said the stock is on his watchlist and he tracks it "very closely".

He went on to say that he could invest in the company in future, based on its profitability target and revenue source.

Paytm shares have been gaining over the past few months and closed sharply higher on Friday at Rs 727 after a 2.83 per cent jump.

"My simple submission is that one of these companies or most of these companies may turn out to be great value creators because of the way the business models are and our understanding of those business models," he said in the interview.

In April, Paytm MD and CEO Vijay Shekhar Sharma shared a letter with shareholders, saying that the company will achieve operating EBITDA breakeven by September 2023, supported by stronger business momentum, scale of monetization and operating leverage.

He also highlighted that the company plans to achieve this without compromising on any of its growth plans.

Paytm has revolutionised digital payments in the country and paved the way for stronger financial inclusion. Several analysts are bullish on Paytm's business model and path to profitability. Top brokerages continue to maintain their BUY' ratings for the stock, based on the scale the company is seeing in its unique high-margin businesses and subsequent revenue growth in each quarter.

Paytm started this financial year on an excellent note, with 89 per cent year-on-year revenue growth in Q1FY23 at Rs 1,680 crore, while EBITDA (Before ESOP) loss reduced to Rs 275 crore, marking an improvement of Rs 93 crore Q-o-Q. The company's contribution profit grew 197 per cent Y-o-Y to Rs 726 crore, leading to an increase in contribution margin to 43 per cent of revenues in comparison to 35 per cent in Q4FY22.

In its latest monthly update for August, the company said its loan distribution business has now reached an annualised disbursal rate of Rs 29,000 crore, while it has disbursed loans worth Rs 4,517 crore during the first two months of Q2FY23.

The company also strengthened its offline payments leadership by deploying over 4.5 million subscription-based payment devices to merchants across the country.

Its strong performance is a reflection of its position in India's digital business landscape as it remains focused on creating long-term shareholder value besides empowering millions of consumers and merchants in the country.