New Delhi [India], November 7 (ANI): Major brokerages, including Bernstein, Jefferies, JM Financial, Mirae Asset Capital Markets, Emkay Global, and YES Securities, have reiterated their positive stance on One 97 Communications Ltd (Paytm) following its Q2FY26 results.
The brokerages in their market update highlighted the company’s sustained profitability, strong financial services expansion, and AI-driven innovation as key drivers of continued growth and investor confidence.
The market updates cited Paytm’s strong operating performance, disciplined cost control, and growing contribution from AI-led products as the key enablers of its profitability and scalability. Bernstein raised its target price to Rs 1,600 and reaffirmed an ‘Outperform’ rating, highlighting “accelerated improvement in margins” and “healthy GMV growth supported by tight cost control and rising financial services revenue.”
The brokerage pointed out that Paytm’s payments margin improved to 10.4 bps during the quarter, driven by higher EMI transactions on POS devices and increased contribution from credit cards on UPI.
In its update, Bernstein added that “continued investment in front-line sales to capture the long tail of online and offline merchants” makes them “more constructive on the long-term payment processing margins.”
JM Financial retained its ‘Buy’ rating with a higher target price of Rs 1,470, saying Paytm continues its “track record of delivering better-than-expected profits.”
The brokerage noted that EBITDA almost doubled sequentially to Rs 1.4 billion and that payment services revenue rose 10 per cent quarter-on-quarter to Rs 12.2 billion, driven by the rising mix of credit card on UPI and EMI on POS. Quoting the company’s management, JM Financial said that “AI is evolving from being a cost-efficiency enabler to a key revenue driver,” with measurable productivity gains across analytics, collections, and underwriting.
Dolat Capital maintained its ‘Buy’ rating with a higher target price of Rs 1,650, citing “robust operational execution, healthy core growth and visible operating leverage.” It noted that Paytm’s “cost discipline efforts led to an EBITDA margin uptick of 311 bps to 6.8 per cent.” The firm also pointed to AI-led offerings that will further boost platform stickiness through Soundbox and enterprise solutions.
Mirae Asset Capital Markets reaffirmed its positive stance, assigning an Add rating with a target price of Rs 1,430. The brokerage highlighted Paytm’s “margin strength and cost discipline” and projected a steady rise in EBITDA margins to 15 per cent by FY28. The brokerage called Paytm’s profitability flywheel “structural,” driven by cost efficiency and a margin-accretive revenue mix, and said AI-led innovation will “sustain growth momentum and reinforce its fintech leadership.”
YES Securities also maintained an ‘Add’ rating with a target price of Rs 1,400, highlighting a 6.8 per cent adjusted EBITDA margin and improved net payments margin, supported by a higher share of credit instruments, particularly EMI. The brokerage noted that this margin improvement is sustainable, adding that “AI expands the opportunity hugely on the merchant side.”
Emkay Global retained its Buy rating with a revised target price of Rs 1,600 (up from Rs 1,500), citing strong execution, expanding profitability, and a long runway for growth. The brokerage observed that Paytm’s Q2FY26 results were “marginally ahead of revenue estimates but significantly ahead of profit expectations.” Emkay expects 25 per cent revenue CAGR over FY25-27, supported by growth in credit-on-UPI, RuPay credit cards, and merchant loans, and called Paytm’s risk-reward “attractive given improving profitability and optionality across payments and financial services.”
Across reports, brokerages agree that Paytm is entering a multi-year growth phase, underpinned by strong fundamentals and innovation-driven expansion. Analysts highlighted the company’s robust cash position of Rs 13,068 crore providing ample capacity for strategic investments and international growth using its proven technology stack. (ANI)
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