The revised goal is the best on the Avenue and marks the primary time Paytm has acquired a goal worth above its IPO worth.
Paytm made its inventory market debut in July 2021 at a problem worth of Rs 2,150, a degree the inventory has not returned to since its itemizing. Bernstein mentioned it has integrated the introduction of the service provider low cost price (MDR) on UPI transactions into its base case from FY28 onwards.
The goal worth hike comes as Bernstein incorporates the introduction of MDR on UPI transactions into its base case from FY28E onwards. The brokerage expects MDR to enhance Paytm’s web funds margin by round 3-4 foundation factors, leading to an estimated 30% enhance in FY30E EPS in contrast with its earlier forecasts.
Bernstein mentioned current feedback from the Ministry of Finance, together with legislative adjustments eradicating the statutory prohibition on charging MDR on UPI transactions, counsel the dialogue has shifted from whether or not MDR will return to when and in what kind. It has subsequently moved UPI monetisation from its optionality assumptions into its base-case forecasts, with the advantages phased in from FY28E onwards.
The brokerage assumes a headline MDR of round 35 foundation factors, relevant solely to a subset of UPI P2M transactions. Given the skew in UPI transaction values, Bernstein estimates that even a restricted charging perimeter may cowl a significant portion of fee worth. It expects MDR to use to round 50% of transaction worth, with Paytm realising round 3-4 foundation factors of incremental web funds margin. That is estimated to translate into round Rs 22 billion of further EBITDA by FY30E.
Additionally learn: Paytm attracts more Gen Z users as its UPI payments growth outpaces industry“Aggressive depth in service provider buying may enhance additional, because of this, realised economics may show to be decrease than revealed charges,” Bernstein mentioned in its word.
The federal government’s place on UPI costs additionally stays in focus. Over the weekend, it mentioned shoppers won’t be charged for UPI transactions. If MDR is launched, it should apply solely to pick out service provider transactions above a sure threshold. The federal government additionally mentioned a income mannequin is required to make UPI self-sustaining, given the continued funding required in cybersecurity, fraud provision and infrastructure.
Paytm Q1 outcomes
The corporate reported robust quarterly earnings. For the quarter ended June 2026, the fintech firm posted a consolidated web revenue of Rs 220 crore, up 79% from Rs 123 crore within the corresponding quarter final yr.
The corporate’s board additionally determined towards continuing with a bonus situation, saying it will as an alternative proceed specializing in compounding development and profitability to create long run shareholder worth.
“After evaluating the proposal from the angle of long run shareholder worth and due deliberation, the Board was of the view that the corporate ought to proceed to give attention to additional compounding development and profitability for shareholder worth creation. Accordingly, the Board determined to not proceed with the mentioned proposal at the moment,” the corporate mentioned.
As a substitute, the board permitted an extra funding of Rs 100 crore by way of subscription to fairness shares of its wholly owned subsidiary, Paytm Cash.
Learn extra: Paytm remains majority Indian-owned for 2nd consecutive quarter
Income from operations rose 28% yr on yr to Rs 2,448 crore from Rs 1,918 crore. On a sequential foundation, income elevated 8% from Rs 2,264 crore within the March quarter. Complete earnings for the quarter stood at Rs 2,630 crore, up 22% from Rs 2,159 crore a yr in the past and better than Rs 2,442 crore reported within the earlier quarter.
(Disclaimer: Suggestions, recommendations, views and opinions given by the consultants are their very own. These don’t characterize the views of Financial Occasions)
