Paytm shares have been upgraded to ‘Overweight’ by JPMorgan. The brokerage has also raised its price target to ₹2,100, citing the potential impact of UPI merchant discount rate (MDR) revenues on fintech companies.
JPMorgan estimates that the UPI MDR could create an industry revenue pool of around ₹17,000 crore on a run-rate basis for FY27. Of this, the brokerage expects 20-30% each to accrue to acquiring banks and their payment aggregators (PAs), as well as third-party application providers (TPAPs).
Paytm operates as both a TPAP and an acquiring PA, giving it exposure across both transaction legs. JPMorgan estimates that factoring in MDR revenues across both legs could result in a 35-54% upgrade to its EBITDA and earnings per share (EPS) estimates for FY27-29E.
The brokerage has also raised its target price-to-earnings (P/E) multiple for Paytm to 46 times from 44 times.
JPMorgan has retained its ‘Neutral’ recommendation on Pine Labs, while raising its price target to ₹190.
The brokerage estimates that MDR-related benefits could drive a 9-28% upgrade to Pine Labs’ EBITDA and EPS estimates for FY27-29E.JPMorgan has increased its target P/E multiple for Pine Labs to 42 times from 40 times.
