Will Paytm Again Touch ₹1,000 Mark? Motilal Oswal Revises Target, Flags Key Drivers

One 97 Communications, the parent company of Paytm, has received ‘neutral’ rating from Motilal Oswal Financial Services, while raising its target price to ₹1,000 from ₹870. The brokerage firm believes that the fintech’s key business metrics remain steady and earnings are approaching an inflection point.

It also defined several key factors, including resumed customer on onboarding, stabilisation in MUTs and continued recovery in financial service business that will drive health growth in the company’s revenues. After a sharp decline in FY25, payment revenue is also estimated to grow by 17% in FY26E.

“The company plans to expand its merchant market share by leveraging deeper financial integration, robust device deployment and focus on high-GMV (Gross Merchandise Value) merchants alongside FLDG-backed monetisation opportunities,” Motilal Oswal said in its latest note.

The brokerage firm stated that Paytm’s GMV is projected to grow at a 23% CAGR between FY25 and FY28. Meanwhile, its disbursement growth rate is expected to accelerate to 35%, driven by sustained focus on the merchant segment and a recovery in consumer lending.

“We estimate a 26% CAGR in financial services revenue, with the segment’s share in total revenue expected to rise by more than 250 bp to ~27% by FY28E. Healthy revenue growth and disciplined cost control will boost contribution margins to ~58% by FY28E, supporting a steady path toward long-term profitability,” it added.

This is not the first time Paytm shares have surged; they had previously touched an all-time high of ₹1,000 in December last year. On Wednesday, Paytm was trading at ₹925.20 on the national stock exchange (NSE) at 3 pm.

Paytm’s Q4FY25 Financials

The fintech has reported narrowing of loss to ₹545 crore for the fourth quarter ended March 31, 2025. The company had incurred a loss of around ₹551 crore in the same period a year ago.

Revenue from operations dropped 15.7% to ₹1,911.5 crore during the quarter from ₹2,267.1 crore in March 2024 quarter.

“Our PAT has improved by ₹185 crore QoQ to ₹(23) crore in Q4 FY25, excluding a one-time exceptional ESOP charge of ₹522 crore. The company’s Founder and CEO, Vijay Shekhar Sharma, voluntarily forgone all 2.1 crore ESOPs granted to him. Starting from Q1 FY26, ESOP cost will be substantially lower with Q1 FY26 ESOP cost to be in the range of ₹75-100 crore as against ₹169 crore in Q4 FY25,” the company had said in an official statement.

In FY25, the company's loss more than halved to ₹645.2 crore from ₹1,390.4 crore in FY24. Revenue from operations declined by about 31% to ₹6,900 crore from ₹9,977.8 crore.

The company further reduced indirect cost by 1% QoQ to ₹991 Cr, and 16% YoY, driven by various factors, including reduction in non-sales employee costs by 36% YoY.