Paytm soars 4% in weak market, nears new high; stock up 90% from March low

Jefferies raises Paytm's earnings estimates for FY28-29 by 20-25 per cent to factor in 25bps MDR on UPI and raises the price target to ₹2,100 (from ₹1,600).

One 97 Communications (Paytm) share price movement

 

Share price of One 97 Communications, the parent company of Paytm, hit an over four-year high at ₹1,804.10, surging 4 per cent on the BSE in Friday’s intra-day deals after Jefferies rated ‘Buy’ on the stock with a revised price target of ₹2,100 from earlier ₹1,600 per share. In comparison, the BSE Sensex was down 0.75 per cent at 74,337 at 10:33 AM.

 

Presently, Paytm quotes at its highest level since November 2021. It is inching toward its record high price of ₹1,961.05 touched on its listing day, i.e. November 18, 2021. The stock has bounced back 90 per cent from its 52-week low of ₹947.10 touched on March 30, 2026. However, Paytm continues to trade below its IPO price of ₹2,150 per share. 

 

 

Pioneer of the mobile payments, QR and Soundbox revolution in India, Paytm is India’s leading payments and financial services distribution company.

 

Jefferies raises price target to ₹2,100 from ₹1,600

 

According to analysts at Jefferies, Paytm stands out for monetisation of client base in near-zero merchant discount rate (MDR) regime, which is now changing favourably. Its 49 million merchant base & strong loan-origination model should drive 25 per cent revenue compound annual growth rate (CAGR) over FY26-29, which, along with op. synergies will aid sharp rise in earnings before interest, taxes, depreciation, and amortization (Ebitda) & profit.

 

Initiatives in credit on unified payment interface (UPI), cloud artificial intelligence (AI) inference models, wealth offering and foray into overseas markets can lift growth, the brokerage said in its report.

 

Jefferies lifted earnings estimates for FY28-29 by 20-25 per cent to factor in 25bps MDR on UPI and raised the price target to ₹2,100 (from ₹1,600).  

JM Financial Institutional Securities view on Paytm

 

With the enabling amendment now passed by Parliament, the path is open for MDR to eventually apply on UPI transactions beyond a defined threshold. This opens an earnings stream for Paytm, which it did not have access to so far. 

 

“While the final rate and eligibility criteria are yet to be settled, we have built our base case estimates from H2FY27 – assuming a 25bps industry-wide MDR and 20 per cent share captured by Paytm (which translates to roughly 5bps of pass-through), and 30 per cent of UPI GMV qualifying for MDR,” analysts at JM Financial Institutional Securities said in the August 2026 report.

 

On these assumptions, analysts estimate incremental revenue of ₹200 crore in FY27 (assuming MDR applicable from H2FY27) and ₹440 crore in FY28. As this revenue carries minimal associated cost, the flow-through to profitability is high; resulting in incremental adjusted Ebitda of ₹130 crore/₹410 crore in FY27E/28E, net of the UPI incentive loss. This makes overall adjusted EBITDA 8.9 per cent/17.8 per cent higher in FY27E/28E relative to earlier numbers, with margin moving up 100bps/250bps to 14.5 per cent/20.4 per cent, the brokerage firm said.

 

However, key risks to this thesis include the eventual rate settling below the 25bps assumption, a turnover threshold calibrated high enough to meaningfully narrow the eligible base, and rollout slipping beyond H2FY27. The brokerage firm reiterated its 'Buy' rating on Paytm with a revised price target of ₹1,950 (earlier ₹1,500) driven by 9 per cent/17 per cent increase in EPS estimates and roll forward to June 2028, valuing Paytm at 40x June’28E EBITDA.  Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.