Buy, sell, hold Paytm stock? Brokerages see up to 33% upside after strong Q2 results; Citi raises target price

Bernstein has the highest target price of Rs 2,200 on Paytm stock, implying an upside of approximately 33 percent from Monday's closing price. Jefferies has a Buy rating with a target of Rs 2,150, while Goldman Sachs and Citi have targets of Rs 2,010 and Rs 1,940, respectively. Paytm's parent company, One 97 Communications, closed at Rs 1,654.70 on Monday, gaining 2.4 percent ahead of its earnings announcement.

The stock has risen 28.1 percent so far in 2026, outperforming the Nifty 50, which has declined 13 percent over the same period. The company's market capitalisation stood at Rs 1.06 lakh crore. Bernstein highlighted Paytm’s strong revenue momentum and improving payment margins. The brokerage said that financial services revenue grew 49 percent year-on-year, while marketing services revenue increased 26 percent.

Net payment revenue rose 7 percent sequentially and 8 percent year-on-year. Although indirect costs increased 14 percent, EBITDA jumped 90 percent year-on-year, delivering a margin of around 10 percent. Jefferies cited sustained business momentum and operating efficiencies. The brokerage said Paytm's EBITDA margin improved sharply to 10 percent, while profit before tax exceeded its estimates by 17 percent.

However, profit after tax, excluding exceptional items, was in line with expectations because of higher taxes. Jefferies expects the introduction of UPI MDR after Diwali to support profitability, alongside continued growth in loan distribution and investments. Citi substantially raised its target price on Paytm stock, citing strong growth and improving margins ahead of the proposed UPI MDR implementation.

The brokerage expects accelerating growth in financial services and improving net payment margins, even excluding the potential UPI benefit. It also highlighted Paytm's increasing investments in artificial intelligence, marketing and distribution to support customer acquisition and expansion. Goldman Sachs maintained its Buy rating but lowered its target price, even as it described Paytm's second-quarter performance as better than expected.

The brokerage highlighted strong market-share gains, revenue growth and improving margins. It estimates that the recently announced UPI MDR could increase Paytm's EBITDA by up to 40 percent, a potential benefit it believes is not fully reflected in the stock price. Goldman Sachs also sees further earnings opportunities from the expansion of Paytm Postpaid and a potential relaunch of its wallet business.

Paytm reported a net profit of Rs 226 crore for Q2 FY27, compared with Rs 21 crore a year earlier, while revenue rose 28.5 percent to Rs 2,648 crore. EBITDA increased 91.5 percent to Rs 270 crore, with margins improving to 10.2 percent from 6.8 percent. Paytm expects the proposed UPI MDR, scheduled for implementation after Diwali, to improve its overall payment processing margin by approximately 2.5 basis points. The company expects the impact to stabilise within two to three quarters after implementation.