The coverage comes at a time when Paytm shares have corrected 20% from its 52-week peak of Rs 1,381 on the NSE. This year, the stock has plunged 15% as domestic and global markets remain hit with Iran-Israel/US war that has now completed 44 days and the issues remain unresolved.
Notwithstanding the recent correction, the stock is trading 31% higher on a one-year basis, witnessing a sharp rebound of 16% in April.
One 97 shares are currently trading above their 50-day simple moving average (SMA) of Rs 1,096 while slipping below their 200-day SMA of Rs 1,173.
4 things that work for Paytm:
1) Leading fintech with strong monetization
Paytm is 3rd largest player in UPI (P2P+ P2M) value share of 6.9% (February 2026) transaction processed. Paytm’s ecosystem evolved from customer to merchant centric with improving monetization capability as indicated by steady rise in revenue per MTU to Rs 1,155 (annually for December 2025 quarter.
“Rise in monetization capability is driven by strong distribution network, diversified product portfolio and strong brand recall. Its vast
active merchant base (48 million December 2025), leadership position within faster growing UPI-P2M and moat in merchant lending should continue drive strong revenue growth of 25% CAGR over FY26-28e,” Haitong note said.Payments contributes 60% of total revenue and should continue dominate revenue mix as per Haitong’s estimates.
2) Strong moat in merchant lending (ML) distribution
Paytm’s financial services distribution has rebounded strongly, with revenue rising 59% YoY in 9MFY26 and its share increasing to 30%, driven largely by merchant lending. Its tech-led collection model and wide sales network create a strong moat, attracting lending partners. With only ~7% of merchants currently using lending services (target: 20%), there remains significant growth potential.
3) Levers for margin momentum
Paytm’s net payments revenue is expected to grow at a 38% CAGR over FY26–28, outpacing GMV growth of 25%, driving margins to 10 bps+ by FY28. The expansion will be led by a higher share of MDR-yielding instruments, rising EMI transactions, growth in Paytm Postpaid, and regulatory approval as a Payment Aggregator. While near-term EBITDA may see some impact from PIDF adjustments, management remains confident of offsetting this over the long term.
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4) Operating leverage
Paytm turned core EBITDA (ex-other income) positive in June 2025 quarter and reported core-EBITDA margin of 6% driven by benefits from operating leverage and reported profit before tax (PBT) of Rs 590 crore in 9MFY26.
“Paytm should continue on its journey to optimize its cost and we expect core EBITDA/PAT to grow by 49%/ 44% CAGR over FY26-28e. We expect Paytm to deliver core-EBITDA (%) of 17% core EBITDA (%) by FY28 broadly in-line with management guidance,” Haitong note said.
5) Peer comparison
Within the payments space, Paytm has built a strong business model at merchants’ end and it has strong moat around distribution of lending products vis-a-vis PB Fintech, PhonePe, Pine Labs, Groww and Moneyview, this brokerage said.
Paytm and PhonePe reported similar revenues, but Paytm stands out with positive core EBITDA (5.3%) versus PhonePe’s losses, while PineLabs remains smaller but profitable. Paytm has also improved efficiency, sharply reducing employee costs and maintaining relatively lower marketing spends. However, it continues to invest more in technology compared to most peers.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)