Global brokerages like Bernstein and Goldman Sachs have maintained bullish ratings on Paytm after its Q4 results beat estimates, citing revenue growth, margin expansion, and strong operating leverage despite the absence of UPI incentives.
Global brokerages, including Bernstein, Goldman Sachs, Citi and Jefferies, have retained bullish ratings on One 97 Communications, the parent company that operates Paytm, after the fintech's March quarter results came in ahead of street estimates with brokerages flagging a beat on revenue, sustained margin expansion in the core payments, and improving operating leverage as the key takeaways.
Key Financials Beat Estimates
Paytm reported revenue of Rs 2,264 crore for the fourth quarter of FY26, an 18 per cent year-on-year (YoY) increase, even as both the UPI incentive was absent and the Payment Infrastructure Development Fund (PIDF) incentive was significantly reduced. The company reported EBITDA at Rs 132 crore, against a loss of Rs 88 crore a year earlier, while reported profit after tax (PAT) stood at Rs 183 crore.
Brokerage-Wise Analysis and Projections
Bernstein retains its Outperform rating and describes it as an "inline quarter" with EBITDA holding up despite the discontinuation of UPI incentive and PIDF incentives. The brokerage reiterated its base case that EBITDA will grow nearly tenfold between FY26 and FY30, on the back of over 20 per cent revenue growth and tight cost control. Bernstein also flagged improving consumer engagement, with Paytm's UPI volumes growing 46 per cent year-on-year against industry growth of around 21 per cent, and steady device additions of about 7 lakh during the quarter, alleviating concerns around competitive intensity.
Goldman Sachs called it a "beat with strong forward outlook," raising its FY27-FY29 revenue estimates. The brokerage projects the EBITDA margin will expand to 9.6 per cent in FY27 and 14.3 per cent in FY28, from 5.9 per cent in FY26, and forecasts a compound annual growth rate of over 50 per cent in EBITDA during FY26-FY30. Goldman Sachs also pointed to the consistent market share gains achieved by Paytm in payments. It stated that its UPI payment value share rose 30 basis points sequentially and 110 basis points over the past 12 months, while its share in person-to-merchant (P2M) payments rose 50 basis points sequentially.
Citi also says core payment margins 'continue to grind higher', the merchant business remains robust with healthy device additions, financial services growth led by merchant loans is sustaining, and operating leverage is playing out as fixed costs remain reined in. Repeat borrowers accounted for more than half of loan disbursements, the brokerage said.
Jefferies added that revenue momentum led by financial services including the lending and wealth platforms was sufficient to support earnings even if UPI incentives remained delayed, while operating efficiency had lifted adjusted EBITDA margins to 8 per cent. Jefferies projects adjusted EBITDA to expand more than fourfold over FY26-FY28.
So overall, top brokerages have painted a positive outlook and strong growth for the company in the coming quarters.
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