Paytm shares: ‘Best digital…’ – What Haitong said | Price targets, Q4 results preview

Haitong Securities has initiated coverage on One 97 Communications Ltd, the parent company of Paytm, where it has highlighted Paytm’s strong position in India’s retail digital payments market, citing its leadership and focus on digitising SME merchants as key drivers of revenue growth.

Paytm’s payments margin shall improve due to a higher share of merchant discount rate (MDR) linked payment instruments and ongoing product innovation. Its merchant lending business benefits from a large on-ground presence, attracting lending partners and contributing to operational leverage. Haitong projects core ebitda margins to rise sharply to 17 per cent by FY28, it noted.

Paytm ranks as the third largest player in UPI value share, with 6.9 per cent of transactions as of February 2026. Its ecosystem has shifted from customer-centric to merchant-centric, reflected in the steady increase in revenue per monthly transacting user to Rs 1,155 in the December 2025 quarter. This growth is supported by a wide distribution network, a diversified product portfolio, and strong brand recognition.

Its active merchant base reached 48 million by December 2025, with payments accounting for approximately 60 per cent of total revenue. Growth in this segment is expected to continue at a 25 per cent CAGR over FY 26-28, driven by increased penetration of subscription merchants, expansion of MDR-linked UPI payments and the likely restart of the flagship wallet business, post approvals, Haitong highlighted.

Haitong expects net payment revenue, including subscription income but excluding incentives, to grow at a 38 per cent CAGR over FY 26-28, outpacing gross merchandise value growth of 25 per cent. This will improve net payment margins to about 10 basis points by FY28. Merchant lending now constitutes 30 per cent of revenue, up from 9 per cent in FY22.

Paytm offers a range of financial products including personal loans, stock brokerage, and insurance distribution. Haitong expects Paytm’s core ebitda and profit to increase approximately fourfold between FY26 and FY28, with return on equity improving to around 12 per cent. It has initiated with an 'outperform' rating with a target price of Rs 1,410.  

Paytm stock price

Shares of Paytm settled at Rs 1107.25 on Monday, falling 1.40 per cent for the day. The company currently commands a total market capitalization close to Rs 71,000 crore. Paytm has tumbled nearly 25 per cent from its 52-week high at Rs 1,381.75, hit in December 2025. The stock is still down nearly 49 per cent from its IPO price of Rs 2,150.  

Paytm Q4 results previews

One 97 Communications (Paytm) has not yet disclosed the date of its results for the quarter and financial year ending on March 31, 2026 but brokerage firms have disclosed their estimates on the company.

YES Securities assume 6.4 per cent QoQ growth in payments services revenue and 8 per cent QoQ growth in financial services and others and arrive at an overall growth in revenue from operations of 3.4 per cent QoQ. It forecasted payment processing charges (PPC) as a proportion of payments revenue to be at 50 per cent, a metric that was 56.3 per cent in 3QFY26.

"We arrive at a total expenses (excl PPC and ESOP Expense) growth of 3.8 per cent QoQ, compared with a growth of 6 per cent in 3QFY26, resulting in an Ebitda margin (excluding other income and before ESOP cost) of 9.8 per cent, an expansion of 266 bps QoQ," it added.

In Paytm, the payments business is expected to grow in high single digits sequentially due to sustained consumption. Payment revenue will see an impact of 3 crore due to PIDF incentives not hitting P&L; however, it will be somewhat offset by 80 crore UPI incentive in 4Q, said JM Financial.

Under  financial services business, while loan disbursal growth is likely to get better due to the improving lending environment, revenue growth will be lower due to reducing DLG loans in the mix. Contribution margin will remain flat sequentially despite phasing out of DLG revenue and increased marketing efforts as the company focuses on gaining consumer market share," it said.

Revenue from operations is likely to remain flat QoQ (14 per cent YoY) at Rs 2,180 crore, while contribution profit is expected to grow by 13 per cent YoY (down 3 per cent QoQ) to Rs 1,215 crore. Contribution margin is expected to remain at 55.6 per cent, said Motilal Oswal Financial Services.  

Paytm target prices

YES Securities has a 'buy' rating on Paytm with a target price of Rs 1,300. Emkay Global Financial Services and JM Financial also have the same rating on the stock with a target price of Rs 1,500 and Rs 1,250, respectively. However, Motilal Oswal has a 'neutral' stance on the stock with a target price of Rs 1,150.