Paytm shares at Rs 1,000? Key catalysts for stock

MOFSL in a fresh note retained its 'neutral' rating on One 97 Communications Ltd (Paytm) but revised its target to Rs 1,000 apiece on the stock, saying the online payment aggregator is making steady progress toward profitability, supported by its strategic shift toward financial services and disciplined cost management. 

Financial services are expected to contribute 27 per cent of revenue by FY28E -- compared with around 25 per cent in FY24, making the business model increasingly margin-accretive.

MOFSL said key catalysts for the stock included a strong loan growth through FLDG-backed partnerships, sustained expansion in the merchant ecosystem, and stringent cost control.

On Monday, the stock traded flat at Rs 925.10 on BSE. 

The focus may remain on core business as MDR on UPI remains distant, MOFSL said. Regulatory headwinds, market share volatility in UPI, and execution risks in the fast-evolving digital payments landscape warrant a cautious stance, it said. 

While Paytm’s Rs 15,600 crore cash cushion provides comfort, consistent operational delivery will be critical for driving sustainable shareholder returns, MOFSL said.

The domestic brokerage estimated revenue CAGR of 22 per cent over FY25–28E, reaching Rs 12600 crore, along with continued merchant-led growth. This positions the company to achieve Ebitda breakeven by FY26E, MOFSL said. 

"We maintain a Neutral rating with a revised target price of Rs 1,000, based on 20 times FY27E Ebitda, reflecting a balance between near-term challenges and long-term potential," it said.

MOFSL said Paytm’s business metrics continue to see a gradual recovery, led by healthy momentum in merchant business, while disbursement volumes and GMV are also growing at a steady rate. Resumed customer onboarding, stabilisation in MTUs and continued recovery in financial services business will drive healthy growth in revenues, it said.

After a sharp decline in FY25, payment revenue is also estimated to grow by 17 per cent in FY26, it projected.