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A report by Mirae Asset Capital Markets has upraged the target of One97 Communications (Paytm) with a buy rating at a target price of Rs 1,340, implying a 19 per cent upside from current levels .
The report noted that Paytm's rising share in UPI transactions, relaunch of its Postpaid product on UPI, and new monetization opportunities underpin the positive outlook. According to Mirae, the reintroduction of Paytm Postpaid as a bank-led credit line on UPI in partnership with Suryoday Small Finance Bank marks a pivotal shift. The product, integrated directly into the UPI ecosystem, allows users up to 30 days of interest-free credit and opens up fresh avenues for scale. Mirae estimated that this could add nearly 6 per cent to Paytm's FY27 EBITDA. The brokerage highlighted that Paytm's earlier BNPL offering had been highly successful, contributing over half of total loan disbursals within 10-11 quarters. While margins under the new UPI credit line are initially lower, profitability is expected to improve as adoption grows and more banks participate in the system. The report further highlighted Paytm's steady performance in UPI. In the last two months, its market share has risen to 7 percent by volume and 5.8 percent by value, even as its largest rival saw declines. Notably, these gains were achieved without significant marketing spends, highlighting the efficiency and resilience of the company's business model. Mirae also emphasized Paytm's strong base of 74 million monthly transacting users and 45 million registered merchants. This wide network offers significant monetization potential across payments, lending, and merchant services. In addition, the company's focus on calibrated cost controls, disciplined marketing, and efficiency gains from AI adoption are expected to support future profitability. The brokerage projects that Paytm could deliver 15 per cent EBITDA margins by FY28, marking a sharp turnaround from negative 21.8 per cent in FY25. "We maintain a positive view on Paytm, given its new sources of revenue, multiple growth drivers, and strong merchant base," Mirae said in its note. "The recent correction in stock price provides a good entry point for investors." (ANI)
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