Key Points

Jefferies reaffirmed its confidence in the company. In its latest report, "Upsides From Business & Costs; Raise Ests & Stay with Buy" (September 21, 2025), the brokerage raised estimates and maintained a "Buy" rating with a revised price target of Rs 1,420 -- a 21 per cent upside from the current market price.

Paytm's merchant franchise stands strong with 45 million merchants, and its lending business is performing well. Jefferies pointed to new opportunities in Postpaid-on-UPI and wealth management products.

The report quoted Paytm Founder and CEO Vijay Shekhar Sharma at the India Forum as saying that "payment platforms have come a long way & now delivering profits." It highlighted Paytm's "strong merchant franchise at 45mn & lending business continues to perform well," and pointed to "new opportunities in recently launched postpaid-on-UPI & wealth."

Jefferies praised the resilience of the company in managing regulatory challenges, noting that the consumer base, which had peaked at 100 million, fell to below 70 million but "now recovered to ~75mn, despite lower marketing spends."

According to the report, "recovery in payments and ramp-up in financial services aided revenues, and along with cost-cutting initiatives helped improve profits."

The brokerage described Paytm as one of India's leading digital payments platforms, with "an active consumer base of 74mn and a merchant base of 45mn as of Jun-25." It noted that the company's merchant payments platform is "rapidly becoming the largest in India with offerings across online and offline channels".

On growth levers, Jefferies underlined that "momentum in lending revenues can continue" and that Paytm is "capitalising on client base for wealth mgmt products (including trading, MFs, gold and margin financing where it already has a book of Rs 3.5-4bn).".

The report called Paytm's Postpaid on UPI offering a significant upside, writing that "even if they ramp up to 1/3rd of past peak, it can provide ~7 per cent upside to our FY27 EBITDA est."

Jefferies also emphasised Paytm's pioneering role in financial inclusion, citing its mission "to bring half a billion Indians into the mainstream economy by providing access to financial services to people previously excluded from the formal banking system." The brokerage further highlighted that the company "embraces data protection and privacy as the foundation of business operations."

Looking ahead, Jefferies stated: "We expect 24 per cent revenue CAGR over FY25-28E, led by healthy growth in financial services (+33 per cent) and payments (+24 per cent). We expect contribution margins to remain stable at ~58 per cent during the period. As operating leverage flows through, we expect EBITDA margins to improve to ~15 per cent by FY28."

Summarising its stance, the brokerage wrote: "We expect EBITDA to rise from a loss of Rs 15bn in FY25 to profit of Rs 5bn in FY26 & Rs 12bn in FY27. We raise our FY27-28 ests by 9-14 per cent led by lower opex and tad higher revenues. Upsides can arise from scale-up of postpaid and approvals for MDR on UPI & wallet. We stay with our BUY call, with a revised PT of Rs 1,420 based on 45x Sep-27 EV/Adj. EBITDA".

- ANI