08 May , 2026 By : Debdeep Gupta
Shares of One 97 Communications (Paytm) traded flat on Friday morning after rallying sharply over the previous two sessions, as brokerages turned somewhat positive following its stronger-than-expected Q4 FY26 results and improving profitability outlook.
The Paytm stock was trading at Rs 1,197 in morning trade. Shares had surged 7.8 percent on Thursday and are up around 10 percent over the last two sessions. The stock has gained about 43 percent over the past one year, outperforming the benchmark Nifty 50 index, which is marginally negative over the same period.
Brokerages highlighted Paytm’s improving operating leverage, revenue momentum and growth potential in merchant lending following the company’s Q4 FY26 results earlier this week.
Macquarie Group maintained its “Neutral” rating on Paytm stock with a target price of Rs 1,265 per share. The brokerage said Paytm’s Q4 profit after tax beat estimates, aided by strong revenue growth and cost control. Macquarie said that revenue rose 19 percent sequentially and 26 percent year-on-year excluding PDF and UPI incentives. It also highlighted that distribution revenue jumped 38 percent YoY, while payments revenue grew 21 percent.
The brokerage said merchant lending penetration remains low at around 7 percent of subscription merchants, leaving significant room for expansion. It added that management reiterated its target of achieving 15-20 percent EBITDA margin over the next 2.5-5 years.
Meanwhile, Bank of America maintained its “Buy” rating and raised the target price on Paytm to Rs 1,350 per share from Rs 1,250 earlier. BofA Securities said Q4 EBITDA beat estimates due to strong operating leverage, even as the management expects accelerating revenue growth and margin expansion in FY27. The brokerage also pointed to the company’s 15-20 percent EBITDA margin aspiration over the next 2.5-3 years.
BofA acknowledged Paytm’s low merchant loan penetration and said the company sees substantial headroom for growth in financial services distribution. It also highlighted the company’s push into wealth management, where Paytm aims to emerge among the top five platforms.
Earlier this week, Paytm reported a net profit of Rs 184 crore for fiscal fourth quarter against a loss of Rs 540 crore in the year-ago quarter, while posting its first-ever full-year profitability. Investors have increasingly focused on Paytm’s improving profitability trajectory and scaling financial services business.
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