Source : INDIA TODAY NEWS
In a striking display of analyst conviction, at least six top domestic and global brokerage firms have ascribed a ‘Buy’ rating to Paytm (One 97 Communications Ltd.), despite action on its associate entity Paytm Payments Bank Ltd. (PPBL). Brokerages have broadly converged on one key theme that the regulatory action on PPBL does little to alter Paytm’s core operating trajectory.
Target prices set by Bernstein, Goldman Sachs, Jefferies, Bank of America, Investec and Emkay Global range from 1,250 to 1,500, pointing to an upside of as much as 31% from its Monday close of 1,138.
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The unanimous response reflects Paytm’s nearly two-year separation from its associate entity. One 97 Communications Ltd., Paytm’s parent company, ended all commercial arrangements with PPBL in March 2024, wrote off its entire investment in FY 2024, and has had no shared management or board members with PPBL since, it said in its exchange filing on Friday.
Leading on that guidance, domestic brokerage Emkay stated it does not see any financial or operational impact on Paytm from the PPBL development. This clarity is reflected in other analyst conclusions. Bernstein says there is “unlikely to be any impact on the company’s numbers,” given the clear separation between PPBL and Paytm. On the other hand, Investec also notes that PPBL does not have any business relationship with One 97 since March 2024 and the company had even written down its entire investment of 2.3 billion in PPBL in Q4 FY24.
With the transition complete, the focus has shifted firmly to growth and execution. Emkay states that it estimates approximately 24% revenue compound annual growth rate (CAGR) over FY26–28, supported by a long growth runway for payments and financial services. Jefferies expects 22% revenue CAGR with contribution margins in the 55–56% range and adjusted EBITDA margin improving to 16% by FY28 as operating leverage flows through. Goldman Sachs expects GMV growth of 26% year-on-year, with continued gains in both consumer and merchant market share, alongside financial services revenue growth of 33% year-on-year.
The improving outlook is also visible in operating performance. In Q3 FY26, Paytm reported revenue of 2,194 crore, up 20% year-on-year, with contribution profit rising 30% to 1,249 crore and margins expanding to 57%, reflecting operating leverage across the business.
The operating story is now anchored in scale and profitability. Strong growth in payments is being complemented by rapid expansion in financial services, with lending, credit products and merchant cross-sell emerging as key monetisation levers. Analysts point to operating leverage kicking in as the company scales, driving margin expansion and improving earnings visibility over the next few years.
Regulatory milestones for the listed entity further strengthen this trajectory. Emkay highlights that the grant of the final Payment Aggregator license in November 2025 signals regulatory confidence in the company, while Goldman Sachs points that authorisation across online and offline merchants as a key enabler for growth.
Brokerage targets reflect this confidence. Emkay and Bernstein are at 1,500, Investec also at 1,500 with a forecast total return of 30.1%, Goldman Sachs at 1,400 implying 22% upside, and Jefferies at 1,350 implying 18% upside.
What emerges across all six brokerage notes is a clear and consistent narrative. The business is scaling across payments and financial services, supported by a strong merchant network, improving market share and expanding monetisation. Operating leverage is coming through, margins are improving, and profitability is strengthening.
– Ends
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SOURCE :- TIMES OF INDIA
