Haitong has initiated coverage with an “outperform” rating and a price target of ₹1,410 apiece.
The brokerage believes that Paytm is well-placed to drive the increasing adoption of retail digital payments in India due to its market leadership position.
Paytm’s sharp focus on digitizing SME merchants improved monetization capability, thereby driving strong revenue growth, Haitong said, adding that there are structural levers in play to drive the improvement in Paytm’s payments margin due to the rise in mix of MDR-linked payment instrument and product innovation.
Paytm’s strong moat in merchant lending led by vast fleet on the street should continue to attract lending partners along with operating leverage benefits driving a sharp uptick in core-EBITDA margin to 17% by FY28, Haitong estimated.
The brokerage expects core EBITDA and profit after tax (PAT) each to quadruple over financial year 2026-2028 and return on equity (RoE) to improve to 12% by financial year 2028.
Of the 21 analysts who have coverage on Paytm, 15 have a ‘buy’ rating, five have a ‘hold’ rating and one has a ‘sell’ rating.
Shares of Paytm fell nearly 4% on Monday but are looking to recover from the lows of the day. The stock is currently trading 1.6% lower at ₹1,106. The stock is up 13% over the last one month but has still declined 14% so far this year. The stock remains nearly 50% below its issue price of ₹2,150.
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