Target Price: ₹1,450
Current Market Price: ₹1,286.35
The positive outlook for One 97 Communications (Paytm) remains strong, driven by substantial earnings growth potential. This growth is anticipated from an increase in payment transactions and loan distribution, alongside opportunities for margin expansion through product upgrades, a shift toward chargeable UPI products, savings initiatives, and operational efficiencies. Additionally, Paytm’s extensive presence in the payment ecosystem provides various avenues for growth, including prospects in postpaid services, wallets, and international markets.
The company’s recent improvements in product innovation, customer and merchant retention, and maximization of free cash flow support this favorable assessment.
For the upcoming fiscal years, projected profit after tax (PAT) figures are estimated at ₹610 crore for FY26, ₹1,530 crore for FY27, and ₹2,230 crore for FY28. The FY26 projection accounts for a one-time loan impairment of ₹1.9 billion to First Games Technology Pvt. Ltd. recorded in Q2FY26, along with a ₹17 crore impairment from Q1FY26. Adjusting for these impairments, the PAT for FY26 is expected to be ₹820 crore.
The valuation methodology for Paytm now employs a 40x multiple on the estimated FY28 EBITDA of ₹2,150 crore. With an additional cash reserve of ₹13,000 crore, the target price is revised to ₹1,450, up from the previous estimate of ₹1,240, based on diluted shares amounting to 67.8 million.
Key risks include slower-than-anticipated growth in gross merchandise value (GMV), forecasted at a compound annual growth rate (CAGR) of approximately 23% from FY25 to FY28, and financial services revenue, which is projected to grow at a CAGR of 25.8% over the same period.
Published on November 26, 2025
