Paytm Share Price Target: Emkay Forecasts Strong Growth with Rs 1,050 Target Price - Details

Emkay assured a ‘BUY’ rating for the Paytm parent company of One 97 Communications with a target price of Rs.1050 amidst a FY2024- 25 ending in losses, with the expectation of a turnaround due to profits in FY26.

Profitability Potential and Loss Turnaround
Paytm suffered heavy net losses of $6.1 billion but is expected to turn around due to anticipated revenue growth coming from payments and financial services, cost optimisation due to lower depreciation and ESOPs and an increase in cash flow boosted by higher treasury income from cash reserves coming through stake sales.

Potential Revenue Boost
Paytm expects to boost revenue by plans of reintroducing merchant discount rates (MDR) on high-value UPI transactions. 
Additionally, securing payment aggregator and wallet licenses to further strengthen revenue streams.

‘Additionally, potential re-introduction of MDR on high-value UPI transactions and receipt of payment aggregator and wallet license (either its own or on rent) should further boost its revenue/profitability and act as a stock catalyst,’ as mentioned in the report by Emkay. 
 

Paytm Q4 Results FY25 
EBITDA excluding ESOP showed a profit in the fourth quarter at $0.8 Billion, arising due to lower incentives to engage in UPI transactions, impairment of subsidiaries and accelerated costs on ESOPs.

The Gross Merchandise Value increased 9% YoY in the quarter indicating healthy transaction values. The number of active merchants rose contributing to stable subscription revenue.

Despite a dip in personal loan disbursements in the Q4, the company is seeing strong growth in merchant loans with a 13% increase in Q4. Management relies on economic conditions to initiate revival in personal loans.

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Paytm Share Price Targets
Emkay holds the “BUY” rating for One 97 Communication with a target price of Rs. 1050 due to revenue and cost optimisation and potential profitability expansions.

‘We expect Paytm to turn profitable from FY26 on which, coupled with a payment aggregator/wallet license and MDR on UPI, could further boost its profitability and act as a stock catalyst. We retain BUY with unchanged TP of Rs1,050,’ as per the report by Emkay.

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