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New Delhi [भारत]July 24 (ANI): Following the June quarter results, global brokerages have become even more bullish on One97 Communications, which runs digital payments company Paytm. He has increased the target price of the company's shares and said that the company is performing well in a large and profitable market.

Paytm reported revenue of Rs 24.5 billion in Q1FY27, up 28% year-on-year and 8% quarter-on-quarter. Net profit rose nearly 79% from a year earlier to Rs 2.2 billion. EBITDA grew 54% quarter-on-quarter to Rs 2.0 billion, improving EBITDA margin to 8.3% from 5.8% in the previous quarter.

Brokerage increased the target price

Gross merchandise value (GMV) grew 31% year-on-year to Rs 7.1 trillion, faster than the 27% and 23% growth in the previous two quarters. Financial services revenue grew 45% year-on-year. All brokerage reports had one thing in common – operating leverage, i.e. revenues, grew much faster than costs, while indirect expenses increased by only 6% year-on-year.

Investec

Investec raised target price to Rs 1,720 from Rs 1,470 and maintained its 'buy' rating. She said the company achieved 'non-linear EBITDA expansion', and core EBITDA rose to Rs 1.92 billion, up nearly 10% from its estimates and 57% quarter-on-quarter. The brokerage said Paytm continued to deliver strong topline growth while building on operating leverage, and raised its EBITDA estimates by 5-6% for FY2027 and FY2028.

Axis Capital

Axis Capital raised its target to Rs 1,490 and maintained 'buy' rating. Excluding the impact of the Payment Infrastructure Development Fund, adjusted EBITDA rose nearly 60% quarter-on-quarter to Rs 2.0 billion, helped by an expansion of nearly 300 basis points in core EBITDA margin, it said. She said the acceleration in payments growth, momentum in high-margin financial services and AI-based operating leverage have improved earnings visibility over the medium term, and current valuations offer attractive risk-reward. It cited increasing traction in postpaid, personal loans, equity broking and wealth products as a key growth driver.

Haitong International

Haitong International maintained its 'Outperform' rating with a target of Rs 1,460. She said financial services revenue growth surprised positively and merchant GMV growth of 32% was higher than expected, led by market-share gains by ganacias. She highlighted that the growth was broad-based across every business line, including small merchants, large merchants, consumer payments and financial services, rather than being driven by any one segment. She also noted that more than half of merchant loan disbursements were made to repeat borrowers, and collection trends were stable.

Morgan Stanley

Morgan Stanley sharply increased its target from Rs 1,175 to Rs 1,450. His thesis described Paytm as a good performer in a market with a very large profit pool. It said it is ahead of consensus on payments and financial-services revenues and margins for fiscal 2027 to fiscal 2029, and expects EBITDA margins to expand to about 19% by fiscal 2029. He sees a revenue growth rate of 25% from FY 2026 to FY 2029. The brokerage also said the stock's recent rally has already captured much of the strong performance.

JP Morgan

JP Morgan raised its target to Rs 1,300 and described the quarter as excellent on every front. It said there was impressive expansion in EBITDA margins, driven by continued control of indirect costs, and pointed to an uptick in GMV on the back of continued Soundbox additions and higher merchant retention. It also flagged a recovering consumer payments business, with monthly transacting users rising to 80 million.

Management confident of growth in future also

Across brokerage notes, management's confidence in reaching 15-20% EBITDA margins over the next two to three years was reiterated, primarily due to operating leverage and slower growth in indirect expenses. Management said the pace of financial services in postpaid, personal loans and wealth products is increasing. Installed devices increased to 15.7 million and registered merchant base increased to 50 million.

Several brokerages also highlighted Paytm's in-house AI stack, which is tuned for Indian languages ​​and runs on its own infrastructure. The company said this is reducing costs and could become a new revenue line for merchants over time. Paytm's cash balance, excluding client balances, stood at about Rs 135 billion, which the brokerage said was a balance-sheet strength. (ANI)

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