Bernstein Bullish On Paytm, Hikes Target Price To INR 1,200

SUMMARY

Bernstein raises Paytm’s target price to INR 1,200, maintaining its ‘outperform’ rating

The brokerage firm remained bullish on Paytm, describing the stock as a ‘long-term’ buy

Paytm established profitability in the first quarter of FY26, reported a consolidated net profit of INR 122.5 Cr

Brokerage firm Bernstein has raised its target price for Paytm’s parent entity One97 Communications to INR 1,200 from INR 1,100, while maintaining an ‘outperform’ rating and describing the stock as a ‘long-term’ buy.

An NDTV Profit report said that Bernstein remains bullish on Paytm’s long-term prospects.

This comes in the wake of regulatory relief for Paytm and its steady profitability, which Bernstein says could unlock strong upside in the coming years.

“While we see limited scope for meaningful earnings or revenue beats versus consensus in the near term, we remain constructive given several catalysts that can drive long-term upside,” the firm reportedly said in a note.

The Vijay Shekhar Sharma-led company turned profitable in the first quarter of FY26, posting a consolidated net profit of INR 122.5 Cr against a net loss of INR 840.1 Cr in the year-ago quarter. The company had reported a net loss of INR 544.6 Cr in the preceding March quarter.

On the brokerage note, Paytm’s stock jumped to INR 1,282.35 during the intraday trading session on the BSE today. However, at 2:47 PM, it was trading 1.76% lower at INR 1,253.70.

Among positive prospects for the fintech major, a potential reintroduction of Paytm’s Buy Now Pay Later (BNPL) product can give a boost to its earnings. “Scaling the BNPL product back to 75% of peak volumes (2023 levels) could add 26% to our FY27E EPS estimate,” the brokerage firm reportedly noted.

“Besides, probable resumption of Paytm Payments Banks Ltd operations could act as a major upside trigger, easing regulatory challenges and paving the way for more favourable approvals,” it added.

Bernstein also noted that a potential NBFC licence can double the contribution from financial services and drive up to 70% upside to Bernstein’s FY30E EPS estimate.

Paytm’s wallet services can also see a revival, however, Bernstein expects limited impact on earnings with the rise of RuPay credit cards on UPI and UPI Lite.

“However, if relaunched after Paytm secures its own PPI (prepaid payment instrument) license, it would further ease the regulatory overhang,” the brokerage firm said.

Notably, to boost its revenue streams, fintech giant Paytm’s board has approved an investment of INR 300 Cr in its investment tech subsidiary, Paytm Money. Paytm Money operates in the investment and wealth management services segment, providing services like stock broking, mutual fund distribution, among others

Payments Business Paved Paytm’s Path To Profitability

In chasing its super app ambition, Paytm overextended into several areas. The regulatory clampdown has given it reason to revisit its business priorities, prompting the company to withdraw from non-core segments.

In August, last year, One97 Communications sold its entertainment ticketing business, including Paytm Insider and TicketNew, to Zomato. After four months, Paytm then sold its stake in the Japanese payment company PayPay, which it held through its subsidiary Paytm Singapore, to SoftBank.

These sales were part of Paytm’s strategy to divest non-core assets and focus on its core payments and financial services businesses after facing regulatory scrutiny

Back then, Sharma said, “Payments remain our primary business, and the merchant side continues to be strong. However, we lost a significant consumer base due to regulatory constraints. Moving forward, we aim to reinvest in the consumer payments business area.”

Paytm’s revenue from operations grew 28% to INR 1,918 Cr in Q1 FY26 from INR 1,502 Cr in Q1 FY25. It was almost flat compared to INR 1,911 Cr operating revenue in Q4 FY25.

After its Q1 financials, brokerage firm Jefferies also upgraded its rating on Paytm from ‘hold’ to ‘buy’, raising its target price. Jefferies raised its target price for Paytm to INR 1,250 per share from INR 900 before.

A couple of weeks ago, the Reserve Bank of India (RBI) granted in-principle authorisation to Paytm’s subsidiary, Paytm Payments Services Limited (PPSL), to operate as a payment aggregator (PA).