Paytm shares: ICICI Securities ups target price by 17%; here's why
Paytm share price target: ICICI Securities retained its 'Buy' rating and raised its target price to Rs 1,450 from Rs 1,240 earlier. On Wednesday, the scrip climbed 2.69 per cent to hit a high of Rs 1,276.50.
- Nov 26, 2025,
- Updated Nov 26, 2025 11:37 AM IST
ICICI Securities has upped its target price on One 97 Communications (Paytm) by 17 per cent, underpinned by the company’s substantial earnings growth potential. The domestic brokerage noted that any rise in Paytm share price would likely stem from growth in payments and loan distribution, margin expansion supported by product upgrades, an improving UPI mix skewed towards chargeable offerings, savings initiatives and operating leverage, as well as optionality from possible new offerings across postpaid, wallet and international businesses.
It added that Paytm’s broad presence across the payments ecosystem continued to strengthen these prospects.
ICICI Securities viewed the risk-reward as favourable and pointed to improving success in product innovation, customer and merchant retention and free cash flow maximisation. Regulatory challenges, particularly their implications for loan growth, remained the key risk, it said.
The brokerage retained its 'Buy' rating and raised its target price to Rs 1,450 from Rs 1,240 earlier. On Wednesday, the scrip climbed 2.69 per cent to hit a high of Rs 1276.50 +33.40 (+
ICICI Securities factored in a compound annual growth rate of about 23 per cent in gross merchant value between FY25 and FY28, compared with a 66 per cent CAGR over FY21–24.
It said GMV growth in FY25 stood at 3 per cent owing to regulatory impact. Net payment take rates excluding UPI and subscription incentives were estimated at around 2.9, 3.3 and 3.6 basis points for FY26, FY27 and FY28.
ICICI Securities assumed UPI incentives of Rs 70 crore annually for FY26–28, broadly similar to FY25. Subscription revenue was projected at Rs 1,390 crore, Rs 1,670 crore and Rs 1,950 crore over FY26–28, against Rs 670 crore in H1 FY26.
Financial services income is estimated at Rs 2,510 crore, Rs 3,210 crore and Rs 3,970 crore over FY26–28, compared with Rs 1,180 crore in H1 FY26, with contributions expected from businesses beyond loan distribution, including postpaid products.
Marketing services revenue is projected to grow at about 12 per cent between FY25 and FY28. Contribution margin excluding UPI incentives is expected at around 58 per cent, 57.4 per cent and 57.3 per cent for FY26–28, compared with 59.3 per cent in H1 FY26.
Driven by operating optimisation, fixed costs including ESOPs were estimated at Rs 4,290 crore, Rs 4,650 crore and Rs 5,070 crore for FY26–28, compared with Rs 2,140 crore in H1 FY26.
ICICI Securities projected Ebitda including ESOPs at Rs 550 crore, Rs 1,390 crore and Rs 2,150 crore for FY26, FY27 and FY28. Strong other income was expected to translate into PAT of Rs 610 crore, Rs 1,530 crore and Rs 2,230 crore over the same period.
The brokerage valued Paytm at 40 times FY28E Ebitda of Rs 21.5 billion and added cash of about Rs 13,000 crore to arrive at a target price of Rs 1,450, based on diluted shares of 67.8 million. It cited slower-than-expected GMV growth and softer financial services revenue—factoring in FY25–28 CAGRs of about 23 per cent and 25.8 per cent respectively—as key risks.
ICICI Securities has upped its target price on One 97 Communications (Paytm) by 17 per cent, underpinned by the company’s substantial earnings growth potential. The domestic brokerage noted that any rise in Paytm share price would likely stem from growth in payments and loan distribution, margin expansion supported by product upgrades, an improving UPI mix skewed towards chargeable offerings, savings initiatives and operating leverage, as well as optionality from possible new offerings across postpaid, wallet and international businesses.
It added that Paytm’s broad presence across the payments ecosystem continued to strengthen these prospects.
ICICI Securities viewed the risk-reward as favourable and pointed to improving success in product innovation, customer and merchant retention and free cash flow maximisation. Regulatory challenges, particularly their implications for loan growth, remained the key risk, it said.
The brokerage retained its 'Buy' rating and raised its target price to Rs 1,450 from Rs 1,240 earlier. On Wednesday, the scrip climbed 2.69 per cent to hit a high of Rs 1276.50 +33.40 (+
ICICI Securities factored in a compound annual growth rate of about 23 per cent in gross merchant value between FY25 and FY28, compared with a 66 per cent CAGR over FY21–24.
It said GMV growth in FY25 stood at 3 per cent owing to regulatory impact. Net payment take rates excluding UPI and subscription incentives were estimated at around 2.9, 3.3 and 3.6 basis points for FY26, FY27 and FY28.
ICICI Securities assumed UPI incentives of Rs 70 crore annually for FY26–28, broadly similar to FY25. Subscription revenue was projected at Rs 1,390 crore, Rs 1,670 crore and Rs 1,950 crore over FY26–28, against Rs 670 crore in H1 FY26.
Financial services income is estimated at Rs 2,510 crore, Rs 3,210 crore and Rs 3,970 crore over FY26–28, compared with Rs 1,180 crore in H1 FY26, with contributions expected from businesses beyond loan distribution, including postpaid products.
Marketing services revenue is projected to grow at about 12 per cent between FY25 and FY28. Contribution margin excluding UPI incentives is expected at around 58 per cent, 57.4 per cent and 57.3 per cent for FY26–28, compared with 59.3 per cent in H1 FY26.
Driven by operating optimisation, fixed costs including ESOPs were estimated at Rs 4,290 crore, Rs 4,650 crore and Rs 5,070 crore for FY26–28, compared with Rs 2,140 crore in H1 FY26.
ICICI Securities projected Ebitda including ESOPs at Rs 550 crore, Rs 1,390 crore and Rs 2,150 crore for FY26, FY27 and FY28. Strong other income was expected to translate into PAT of Rs 610 crore, Rs 1,530 crore and Rs 2,230 crore over the same period.
The brokerage valued Paytm at 40 times FY28E Ebitda of Rs 21.5 billion and added cash of about Rs 13,000 crore to arrive at a target price of Rs 1,450, based on diluted shares of 67.8 million. It cited slower-than-expected GMV growth and softer financial services revenue—factoring in FY25–28 CAGRs of about 23 per cent and 25.8 per cent respectively—as key risks.