New Delhi, 7 May (IANS). Paytm (One 97 Communications Limited) has made significant operational changes in the fourth quarter of FY 2025. The company has achieved an important milestone in its route for continuous benefits by gaining benefits on EBITDA before ESOP level.
Major brokerage has increased its price targets, giving positive reactions to this and highlights the improvised basic principles of Paytm, fast cost control and extended merchant ecosystem.
Bernstein repeated his outperform rating and said, “Paytm has gained EBITDA brake-building with PAT profitability.”
Bernstein has set a price target of Rs 1,100, indicating a potential 35 percent increase.
Brokerage informed about some development drivers who pursue EBITDA before ESOP profitability in this quarter.
Brokerage reports stated, “Paytm became profitable on EBITDA before the Paytm ESOP basis, resulting in a combination of stable payment margin and gradual increase in the revenue of financial service as well as a slight decline/stable experiences line.
JM Financial reiterated the optimism, saying, “Adjusted EBITDA profitability was achieved, focusing on PAT in the next quarter.”
The firm maintained its ‘Boying’ rating with an increased price target of Rs 1,070.
This contributed Paytm’s contribution to margin expansion and disciplined expenditure control as the major positive factor, as well as strengthening the stable increase in merchant loans and strengthening the financial service business of the company.
Morgan Stanley, while maintaining his approach, pointed to Paytm’s ‘strong cost control’ and upgraded his EBITDA estimates.
The firm highlighted the confidence of management in providing PAT profitability from the first quarter of FY 2026 and noted that the monthly transaction users (MTUs) of Paytm are already recovering after regulatory barriers.
The city retained its boying calls with a price target of Rs 975, which has been estimated by 19 percent.
This has expected a strong growth in the revenue and contribution of Paytm at a strong speed, which is an estimated 28 percent and 33 percent CAGR respectively in FY 2025-2027.
“Paytm’s business is in good condition after the challenging financial year 2025, with mostly positive potential triggers,” City said in its report.
Among those who take more vigilant stance, the improvised trajectory of Paytm is recognized.
Both Goldman Sachs and UBS accepted the company’s income change, but maintained a ‘neutral rating’ citing the need for more regulatory clarity regarding UPI montization.
Goldman Sachs kept its price target stable with Rs 705 and UBS with Rs 1,000, which reflects the cost discipline and confidence in revenue collection of Paytm.
Brokerage also pointed to several upcoming triggers, which can further intensify the development of Paytm.
These include possible UPI montization, withdrawal of wallet service and constant merchant ecosystem expansion.
Cost efficiency is now firmly established, indirect expenditure has decreased by 16 percent on an annual basis and ESOP cost is expected to decrease rapidly from FY 2026.
With a gradual increase of 9 percent in the revenue of financial service and 13 percent increase in merchant loan distribution on a quarterly basis, Paytm is seen in good condition to give a profitable increase in quarters coming by several brokerage.
Given PAT profitability, analysts have confidence in the strong growth of Paytm.
-IANS
SKT/ABM
