Paytm hit 52-week high after posting Q1, but soon pares gain; Buy or Sell?

Paytm Q1 review: What to do with Paytm shares after the company swings into profit from loss Y-o-Y; analysts decode

Paytm Q1 review: One 97 Communications, the parent company of Paytm, shares rose 3.5 per cent in trade, hitting a 52-week high at ₹1,090 per share on BSE. The buying on the counter came after the company reported its Q1 numbers on Tuesday, after market hours.  

However, at 10:37 AM, Paytm share price pared gains and was trading 1.59 per cent lower at ₹1,035.9 per share on BSE. In comparison, BSE Sensex was up 0.20 per cent at 82,348.98. The market capitalisation of the company stood at ₹66,165.13.

Paytm Q1 results 

The June quarter (Q1FY26) marked a turnaround for Paytm as the company reported the consolidated profit of ₹122.5 crore, against a net loss of ₹838.9 crore in Q1FY25. Paytm had posted a net loss of ₹539.8 crore in Q4FY25.

 

In Q2FY25, Paytm had reported a profit, but it was due to the sale of its ticketing business to Zomato. Now, Q1FY26 marks the first-ever profit after tax (PAT)-positive quarter for the company, led by  normal business operations. 

 

Additionally, its revenue from operations grew 27.7 per cent to ₹1,917.5 crore in Q1FY26 from ₹1,501.6 crore in Q1FY25. Sequentially, revenue from operations remained stagnant compared to ₹1,911.5 crore in Q4FY25. 

Analysts view on Paytm shares

Analysts believe that while the results were largely in line with expectations, a few more quarters need to be observed to clearly understand the company’s growth trajectory.

 

Paytm’s results were broadly in line with expectations and largely factored into the stock price, according to Kranthi Bathini, director – equity strategy at WealthMills Securities.

 

He recommended ‘holding’ Paytm shares while keeping a watch on the profit sustainability and growth trajectory from hereon.

 

Echoing a similar view, Khushi Mistry, research analyst at Bonanza, believes Paytm’s Q1 results mark a steady step in its post-disruption recovery, driven by sustained merchant activity and platform resilience.

 

“In Q1, Merchant payment metrics have rebounded, and consumer metrics remain stable. The business continues to suffer from recent operational disruptions and regulatory changes, but management expects improvement in subsequent quarters as merchant activity recovers,” said Mistry. 

 

The number of registered merchants with Paytm grew 11 per cent on a year-on-year (Y-o-Y) basis to 45 million in Q1FY26 from 41 million in Q1FY25. Sequentially, this count grew 3 per cent from 44 million in Q4FY25. The company reported an all-time high of 13 million merchant subscriptions, including payment acceptance devices, in Q1FY26. This number has grown from 10.9 million in Q1FY25 and 12.4 million in Q4FY25.  ALSO READ | Dixon Tech Q1 beats estimates; analysts upbeat on mobile gains, JV strategy

Brokerages view on Paytm

Macquaire iterated ‘Underperform’ with a target of ₹760 per share, according to reports. The brokerage said that there are potential levers for earnings upside going forward for the company, even as personal loan disbursements remain muted.

 

On the flipside, Jefferies upgraded its rating from ‘Hold’ to ‘Buy’ and raised the target to ₹1,250 per share from ₹900, according to reports. 

 

The global brokerage reckons that while the Monthly Transacting Users (MTU) and Gross Merchandise Value (GMV) growth on a sequential basis is encouraging, contributing margins will stabilise a little lower over the next two to three quarters.

 

Citi also increased its target to ₹1,215 per share from ₹915, maintaining ‘Buy’ rating. According to reports, Citi cited that the earnings beat was driven largely by incremental cost efficiencies and higher-than-expected benefits from the relatively upfront nature of non-DLG contribution profits.  Domestic brokerage, JM Financial Institutional Equities has continued with a 'Buy', raising the target to ₹1,320 per share from ₹1,230 per share.   The brokerage noted that with robust topline growth at key commerce merchants and controlled indirect expenses, Paytm is likely to witness a sharp improvement in profitability, with PAT estimated to reach ₹1,450 crore by FY27. The brokerage finds Paytm attractively positioned, citing its strong operating performance and multiple growth drivers, including the introduction of MDR on UPI transactions and the comeback of the Paytm wallet.

Technical view on Paytm 

Drumil Vithlani, technical research analyst, Bonanza, recommends holding existing positions in Paytm. 

 

“For traders holding existing positions, are advised to maintain a stop-loss at ₹1,000 and continue holding for a potential upside towards ₹1,100, provided the stock sustains above the breakout zone with supportive volume action,” said Vithlani.