New Delhi [India], July 23 : Leading global and domestic brokerages have rallied behind One97 Communications Ltd (Paytm) following its robust Q1FY26 results, describing the quarter as a pivotal moment in the company's journey to sustainable profitability.
Analysts from BofA, Goldman Sachs, Morgan Stanley, Bernstein, Motilal Oswal, Citi, HSBC, ICICI Securities, Jefferies, and JPMorgan have issued positive commentary, with many raising their price targets.
India's financial services firm Motilal Oswal called the results a "significant turnaround," citing a profit after tax (PAT) of Rs 1.2 billion and record-high contribution margins of 60 per cent. The brokerage attributed the improvement to continued cost rationalisation and a scale-driven margin expansion.
Additionally, BofA raised its target price from Rs 1,005 to Rs 1,160, highlighting sharp cost discipline and momentum in merchant acquisition. Paytm is competitively well-positioned in merchant space, especially with its first-mover Soundbox advantage," BofA analysts noted.
Morgan Stanley noted "encouraging" regarding the company's Q1 results and appreciated Paytm's expansion in financial services. Similarly, Goldman Sachs lauded Paytm's margin improvements and upgraded earnings forecasts based on improved monetisation metrics.
Bernstein emphasised the credibility of the quarter, noting that "profitability was achieved without one-offs." With a 27 per cent year-on-year GMV growth to Rs 5.4 trillion, Paytm recorded its highest-ever transaction volume, reinforcing confidence in its execution model.
ICICI Securities called the results "solid," underscoring efficiency in scaling financial services and lending. Jefferies and HSBC echoed sentiments on cost-efficient growth and merchant penetration without a spike in marketing spend.
Citi sees Paytm's merchant base currently over 45 million, with device revenue proving to be "sticky and churn-resistant." It further added that device monetisation and recurring revenue streams from financial distribution continue to scale efficiently.
Even JPMorgan, maintained an Underweight rating, acknowledged a "sharp EBITDA margin expansion to 4 per cent," predicting consensus earnings upgrades.
Overall, the voices of India's leading research houses are acknowledging Paytm's profitability, with a narrative that the company's deep merchant ecosystem, scalable monetisation model, and maturing cost structure have positioned it for sustained, profitable growth.
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