Paytm shares in an uptrend, hit record high for second day; what's next?

Shares of Paytm (listed as One 97 Communications Ltd) hit their record high for the second straight session on Friday as investors were upbeat over brokerages' positive stance post Q2 earnings and inclusion in the MSCI India Standard Index along with three other stocks. Paytm shares rose 2.29% to a fresh high of Rs 1,350.5 in the current session against the previous close of Rs 1320.55. Market cap of Paytm climbed to Rs 86,122 crore on BSE. 

The stock reached a record high of Rs 1,333.80 also on Thursday.

Total 1.10 lakh shares of the firm changed hands amounting to a turnover of Rs 14.69 crore. Paytm stock has risen 54% in six months and gained 69% in a year.  The stock has a beta of 1.3, indicating high volatility in a year.

In terms of technicals, the relative strength index (RSI) of Paytm stands at 63.4, signaling it's trading neither in the overbought nor in the oversold territory. Shares of Paytm are trading higher than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

YES Securities has a price target of Rs 1400 on the stock. It has maintained an add call post Q2 earnings. 

The brokerage assigned a revised price target of Rs 1400 and said it values PAYTM at 45 times FY28 P/E for an FY28E-31E EPS CAGR of 33%.

Motilal Oswal has a neutral call on the PayTm stock with a price target of Rs 1200. 

"We marginally raise our contribution margin assumptions for Paytm, driven by stronger revenue traction and prudent opex control. Despite the one-off impairment charge in Q2, we maintain our profitability estimates. We project a PAT of Rs 6.4 billion in FY26 and Rs 12.7 billion in FY27. We value Paytm at Rs 1,200, based on 22x FY30E EBITDA discounted to FY27E, translating into 8.2x FY27E sales. We reiterate our NEUTRAL rating on the stock," said the brokerage. 

However, Jefferies is positive on the stock and raised its price target to Rs 1,600 with a 'Buy' call. Growth in the core business and a ramp-up in new areas is likely to drive a 24% CAGR in revenues and expansion in EBITDA margins over FY25-28, said the global brokerage. 

Another brokerage firm Citi has a 'Buy' rating on Paytm, with a price target of Rs 1,500.

Strong growth and market share momentum in credit on UPI (RuPay and Postpaid) continue to act as a tailwind, likely benefiting net payment margins (ex-devices), which stood at over 4 basis points (bps) in Q2 versus Citi's estimate of 3.6 bps.

The brokerage upped its margin estimates to 4.2 bps (from 3.6 bps earlier) for FY26-28.

Device costs, across new device capex and refurbishment, have meaningfully declined, improving overall device economics. The outlook on growth and EBIT margins remains robust, it said

Paytm's operating revenue rose 24% year-on-year (YoY) to Rs 2,061 crore, led by continued growth in its payments and financial services businesses. The company clocked a profit after tax (PAT) of Rs 211 crore before a one-time charge for full impairment of a Rs 190 crore loan to its JV, First Games Technology Pvt Ltd.

However, profit slumped 83% sequentially, affected by exceptional items, according to an exchange filing on Tuesday. The company reported a consolidated profit of Rs 21 crore against Rs 123 crore in the previous quarter. Paytm said that it recorded an impairment loss against a loan given to the joint venture First Games Technology Pvt Ltd. of Rs 190 crore during the quarter and six-months ended September 30. 

This is the second consecutive quarter of net profit for the company. Paytm reported its first-ever quarterly net profit since listing in the first quarter. The firm clocked a profit of Rs 122.5 crore in the June 2025 quarter led by a sharp fall in  expenses. In the June 2024 quarter, loss of the firm stood at Rs 840 crore.