Paytm's parent company, One97 Communications, saw its shares fall by 5% to Rs 853.20 on Tuesday due to profit booking after the fintech giant reported a narrower net loss for the third quarter. Despite this decline, major brokerages remain optimistic about Paytm’s future growth and are positive on its stock.
Founder and CEO Vijay Sekhar Sharma expressed confidence, stating that Paytm is on track to achieve profitability in the next quarter, driven by improvements in its business metrics. Paytm is benefitting from factors such as its robust merchant payment business and growing lending operations, alongside the expected impact of UPI incentives, which total Rs 350 crore.
JM Financial, which has set a target price of Rs 1,250 for Paytm, reaffirmed its "buy" rating, expecting the default loss guarantee cost to normalize, resulting in a PAT profitability in the coming quarter. Motilal Oswal estimates Paytm to become EBITDA positive by FY27, valuing the company at Rs 950, while maintaining a "neutral" rating.
Yes Securities also maintains an "add" rating for Paytm, with a revised target price of Rs 1,050. Analysts believe that the fintech firm’s strong merchant payment and lending business, combined with improving monthly transacting units, will help drive its profitability in FY26. However, Macquarie remains cautious, maintaining its "underperform" rating despite strong Q3 results.
