New Delhi, May 7 (IANS) Paytm (One97 Communications Limited) has delivered a solid operational turnaround in Q4 FY25, achieving profitability at the EBITDA before ESOP level — a significant milestone in its path to sustained profits.
To this, leading brokerages have responded positively, raising their price targets and highlighting Paytm’s improving fundamentals, sharp cost control, and expanding merchant ecosystem.
According to Bernstein, which reiterated its Outperform rating, Paytm has “achieved EBITDA breakeven with PAT profitability in sight.”
Bernstein has set a price target of Rs 1,100, implying a potential 35 per cent upside. The brokerage attributed a couple of growth drivers leading to EBITDA before ESOP profitability this quarter.
“A combination of stable payment margins and sequential growth in financial services revenue, coupled with a marginal decline/stable expenses line resulted in Paytm turning profitable on EBITDA before ESOP basis,” said the report by the brokerage.
JM Financial echoed this optimism, stating, “Adjusted EBITDA profitability achieved, PAT in focus next quarter”. The firm maintained its ‘Buy’ rating with a raised price target of Rs 1,070.
It cited Paytm’s contribution margin expansion and disciplined expense control as key positives, along with steady growth in merchant loans and improved collection efficiency that are strengthening the company’s financial services business.
Morgan Stanley, while maintaining its view, pointed to Paytm’s “strong cost control” and upgraded its EBITDA estimates. The firm highlighted management’s confidence in delivering PAT profitability starting Q1 FY26 and noted that Paytm’s monthly transacting users (MTUs) are already recovering after recent regulatory headwinds.
Citi retained its Buy call with a price target of Rs 975, projecting a 19 per cent upside. It expects Paytm’s revenue and contribution profits to grow at a robust pace, estimating a 28 per cent and 33 per cent CAGR over FY25-27, respectively. “Paytm’s business is in sound shape post a challenging FY25, with mostly positive potential triggers ahead,” Citi stated in its report.
Even among those maintaining more cautious stances, there is recognition of Paytm’s improving trajectory. Goldman Sachs and UBS both acknowledged the company’s earnings turnaround but have maintained Neutral ratings, citing the need for greater regulatory clarity around UPI monetization. However, both firms raised their price targets — Goldman Sachs to Rs 705 and UBS holding steady at Rs 1,000 — reflecting confidence in Paytm’s cost discipline and revenue recovery.
Brokerages also pointed to multiple upcoming triggers that could further accelerate Paytm’s growth. These include potential UPI monetization, the return of wallet services, and continued merchant ecosystem expansion. Cost efficiencies are now firmly in place, with indirect expenses down 16 per cent year-on-year and ESOP costs guided to reduce meaningfully from FY26.
With financial services revenue growing 9 per cent sequentially and merchant loan disbursals up 13 per cent QoQ, Paytm is seen by several brokerages as well-positioned to deliver profitable growth in the coming quarters. With PAT profitability in sight, analysts are increasingly confident in Paytm’s strengthening growth trajectory.
–IANS
na/
Disclaimer
The information contained in this website is for general information purposes only. The information is provided by BhaskarLive.in and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Through this website you are able to link to other websites which are not under the control of BhaskarLive.in We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, BhaskarLive.in takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
For any legal details or query please visit original source link given with news or click on Go to Source.
Our translation service aims to offer the most accurate translation possible and we rarely experience any issues with news post. However, as the translation is carried out by third part tool there is a possibility for error to cause the occasional inaccuracy. We therefore require you to accept this disclaimer before confirming any translation news with us.
If you are not willing to accept this disclaimer then we recommend reading news post in its original language.
