Brokerages Bullish on Paytm Despite RBI Action on Payments Bank

According to a report by Emkay Global Financial Services, the impact on Paytm is negligible as the company had already terminated its commercial agreements with PPBL and fully impaired its equity investment by March 2024.

The brokerage said Paytm is "legally ring-fenced" from the payments bank entity. It also noted that the RBI granting a final Payment Aggregator licence to Paytm in November 2025 reflects regulatory comfort with the listed entity.

It said, "We do not see any financial or operational impact on Paytm, as all commercial agreements with PPBL were terminated and the equity investment was fully impaired by Mar-24".

From a business fundamentals perspective, analysts remain strongly constructive, while highlighting Paytm's strong balance sheet and cash position, providing flexibility to invest in growth and product innovation.

Jefferies maintained a positive outlook on Paytm's growth, expecting a 22 per cent revenue CAGR over FY26-28, driven by strong performance in financial services and payments. It also expects margins to improve, with adjusted EBITDA margin likely to reach 16 per cent by FY28.

The brokerage highlighted that several steps have already been taken since 2024, including shutting the wallet, transferring UPI handles, writing off investments, and resetting the bank's board.

Goldman Sachs noted that Paytm holds a 49 per cent stake in PPBL but had already impaired its entire investment in early 2024 and currently derives no revenue from the bank.

It also highlighted continued growth in Paytm's business, with gross merchandise value (GMV) growth accelerating to 26 per cent year-on-year.

It added, "We also preview Paytm 4QFY26 earnings, where we have seen continued gains in both consumer and merchant market share".

Investec Equities also said there is a limited direct impact on Paytm's business. However, it noted that it will be watchful of any potential near-term impact on merchant subscription additions (14.4m devices as of 3Q26 with 600-700k devices being added per quarter), and hence subscription revenues (16 per cent of Paytm's net revenue in 3Q26).

BofA Securities in its research, said that it was surprised by the tone of the RBI's statement. It noted that while current operations are not impacted, it could become complex for Paytm to obtain future licences, such as a prepaid instrument licence.

Meanwhile, Bernstein added that the loss of the payments bank does not affect the structural viability of Paytm's payments business, with merchant acquiring continuing as a key function.

Overall, brokerages believe that Paytm's core business remains largely unaffected, following the RBI's action.

The share price of the One 97 Communications opened at Rs 1141/share on Tuesday up 1.03 per cent from the previous day's close.

- ANI