Brokerage firm Jefferies has retained its ‘Buy’ rating on Paytm and raised its price target to ₹2,100 from ₹1,600 earlier. The revised target is just below Paytm’s IPO price of ₹2,150.
Jefferies said Paytm stands out for its ability to monetise its customer base despite the near-zero merchant discount rate (MDR) regime, which is now changing favourably.
The brokerage believes Paytm’s 49 million-strong merchant base, coupled with its strong loan-origination model, should help drive a 25% revenue compounded annual growth rate (CAGR) between financial year 2026 and financial year 2029. This, along with operational synergies, is expected to support a sharp increase in EBITDA and profit.
Initiatives around credit on UPI, cloud AI inference models, wealth offerings and expansion into overseas markets could provide additional growth levers, Jefferies said.
The brokerage has raised its earnings estimates for financial years 2028 and 2029 by 20% and 25%, respectively, factoring in a 25-basis-point MDR on UPI transactions.
Another brokerage Bernstein has maintained an ‘Outperform’ rating on Paytm, with a price target of ₹2,200.The brokerage expects meaningful operating leverage from the existing business. It believes the introduction of MDR on UPI could provide meaningful upside to profitability.
Bernstein sees a clear right to win for Paytm, along with a long growth runway.
