Broker’s call: Paytm (Neutral) – The Hindu BusinessLine

We estimate a 26 per cent CAGR in financial services revenue, with the segment’s share in total revenue expected to rise by more than 250bp to around 27 per cent by FY28E
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SAHIBA CHAWDHARY

Target: ₹1,000

CMP: ₹930

One97 Communications (Paytm) business metrics continue to see a gradual recovery, led by healthy momentum in merchant business, while disbursement volumes and GMV are also growing at a steady rate. Resumed customer onboarding, stabilisation in MTUs and continued recovery in financial services business will drive healthy growth in revenues. After a sharp decline in FY25, payment revenue is also estimated to grow by 17 per cent in FY26E.

The company plans to expand its merchant market share by leveraging deeper financial integration, robust device deployment and focus on high-GMV merchants alongside FLDG-backed monetisation opportunities.

Paytm’s GMV is thus expected to clock a 23 per cent CAGR over FY25-28E and its disbursement growth rate is estimated to accelerate to 35 per cent, led by a continued thrust on the merchant business and a recovery in consumer lending.

We estimate a 26 per cent CAGR in financial services revenue, with the segment’s share in total revenue expected to rise by more than 250bp to around 27 per cent by FY28E.

While structural levers are strong, the fast-evolving digital payment industry, a decline in UPI market share and regulatory risks (recent government disapproval of MDR on UPI transactions) keep us cautious. Maintain Neutral with a revised TP of ₹1,000

Published on July 1, 2025