Paytm soars 4% in weak market, nears new high; stock up 90% from March low

JM Financial Institutional Securities view on Paytm

“While the final rate and eligibility criteria are yet to be settled, we have built our base case estimates from H2FY27 – assuming a 25bps industry-wide MDR and 20 per cent share captured by Paytm (which translates to roughly 5bps of pass-through), and 30 per cent of UPI GMV qualifying for MDR,” analysts at JM Financial Institutional Securities said in the August 2026 report.

On these assumptions, analysts estimate incremental revenue of ₹200 crore in FY27 (assuming MDR applicable from H2FY27) and ₹440 crore in FY28. As this revenue carries minimal associated cost, the flow-through to profitability is high; resulting in incremental adjusted Ebitda of ₹130 crore/₹410 crore in FY27E/28E, net of the UPI incentive loss. This makes overall adjusted EBITDA 8.9 per cent/17.8 per cent higher in FY27E/28E relative to earlier numbers, with margin moving up 100bps/250bps to 14.5 per cent/20.4 per cent, the brokerage firm said.

However, key risks to this thesis include the eventual rate settling below the 25bps assumption, a turnover threshold calibrated high enough to meaningfully narrow the eligible base, and rollout slipping beyond H2FY27. The brokerage firm reiterated its 'Buy' rating on Paytm with a revised price target of ₹1,950 (earlier ₹1,500) driven by 9 per cent/17 per cent increase in EPS estimates and roll forward to June 2028, valuing Paytm at 40x June’28E EBITDA. Disclaimer: Views and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers' discretion is advised.