New Delhi, May 7 Paytm (One97 Communications Limited) has delivered a solid operational turnaround in Q4 FY25, achieving profitability at the EBITDA before ESOP level -- a significant milestone in its path to sustained profits.
To this, leading brokerages have responded positively, raising their price targets and highlighting Paytm’s improving fundamentals, sharp cost control, and expanding merchant ecosystem.
According to Bernstein, which reiterated its Outperform rating, Paytm has "achieved EBITDA breakeven with PAT profitability in sight."
Bernstein has set a price target of Rs 1,100, implying a potential 35 per cent upside. The brokerage attributed a couple of growth drivers leading to EBITDA before ESOP profitability this quarter.
“A combination of stable payment margins and sequential growth in financial services revenue, coupled with a marginal decline/stable expenses line resulted in Paytm turning profitable on EBITDA before ESOP basis,” said the report by the brokerage.
JM Financial echoed this optimism, stating, “Adjusted EBITDA profitability achieved, PAT in focus next quarter”. The firm maintained its ‘Buy’ rating with a raised price target of Rs 1,070.
It cited Paytm’s contribution margin expansion and disciplined expense control as key positives, along with steady growth in merchant loans and improved collection efficiency that are strengthening the company’s financial services business.
Morgan Stanley, while maintaining its view, pointed to Paytm’s “strong cost control” and upgraded its EBITDA estimates. The firm highlighted management’s confidence in delivering PAT profitability starting Q1 FY26 and noted that Paytm’s monthly transacting users (MTUs) are already recovering after recent regulatory headwinds.
Citi retained its Buy call with a price target of Rs 975, projecting a 19 per cent upside. It expects Paytm’s revenue and contribution profits to grow at a robust pace, estimating a 28 per cent and 33 per cent CAGR over FY25-27, respectively. “Paytm’s business is in sound shape post a challenging FY25, with mostly positive potential triggers ahead,” Citi stated in its report.
Even among those maintaining more cautious stances, there is recognition of Paytm’s improving trajectory. Goldman Sachs and UBS both acknowledged the company's earnings turnaround but have maintained Neutral ratings, citing the need for greater regulatory clarity around UPI monetization. However, both firms raised their price targets — Goldman Sachs to Rs 705 and UBS holding steady at Rs 1,000 — reflecting confidence in Paytm’s cost discipline and revenue recovery.
Brokerages also pointed to multiple upcoming triggers that could further accelerate Paytm’s growth. These include potential UPI monetization, the return of wallet services, and continued merchant ecosystem expansion. Cost efficiencies are now firmly in place, with indirect expenses down 16 per cent year-on-year and ESOP costs guided to reduce meaningfully from FY26.
With financial services revenue growing 9 per cent sequentially and merchant loan disbursals up 13 per cent QoQ, Paytm is seen by several brokerages as well-positioned to deliver profitable growth in the coming quarters. With PAT profitability in sight, analysts are increasingly confident in Paytm’s strengthening growth trajectory.
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