Major brokerages remain positive on Paytm as the fintech managed to narrow its third quarter net loss, with the company continuing to witness an improvement in business metrics. Founder and CEO Vijay Sekhar Sharma on Tuesday said the company is poised to achieve profitability in the next quarter.
Shares of One97 Communications, the parent, on Tuesday declined around 7% in intra-day trade because of profit booking, before closing down 5% to Rs 853.20 on the BSE.
JM Financial said it expects the impact of default loss guarantee cost to normalise with the contribution margin reverting to 55% (excluding UPI incentives) and the company reporting the PAT profitability in the next quarter, thanks to UPI incentives worth Rs 350 crore. “We reiterate our ‘buy’ rating with March 2026 target price of Rs 1,250, valuing Paytm at 70x FY27E PER,” the brokerage said in a note.
Motilal Oswal Financial Services estimates Paytm to turn Ebitda positive by FY27. “We value Paytm at Rs 950, based on 18 times FY30 Ebitda discounted to FY26E, which corresponds to 6.1 times FY26E sales,” said the brokerage, while maintaining its ‘neutral’ rating.
Analysts at Yes Securities, too, exuded confidence about Paytm’s Ebitda breakeven plans. It has kept its ‘add’ rating with a revised target price of Rs 1,050.
According to analysts, factors such as strong merchant payment/lending business and improving monthly transacting units are likely to put Paytm on the path to profitability in the next fiscal.
Meanwhile, Macquarie has maintained its ‘underperform’ rating on Paytm after Q3 results. It said Q3 was strong beat on all fronts.
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