Shares of fintech major One97 Communication (Paytm) rose over 3.5% in the trading session on Wednesday. The stock was trading at ₹1,257 apiece at 9.20 am today, but it has climbed to ₹1,287.60 at 3.10 pm. The quick upward movement reflects improving investor sentiment around the stock despite recent volatility in the market.
The stock price witnessed a sharp uptick after ICICI Securities upped its target price on Paytm by 17%. The brokerage firm retained its ‘Buy’ rating and raised its target price to ₹1,450 per share from the earlier ₹1,240. It noted that any rise in Paytm share price would likely stem from growth in payments and loan distribution.
“….margin expansion prospects from a combination of product upgrades, improving UPI mix towards chargeable products, savings initiatives and operating leverage; presence of optionality through possible offerings, including traction in postpaid or wallet complemented by its diverse presence,” it said.
31 October 2025
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Hence, it viewed the risk-reward as “favourable”, while pointing to better success in product innovations, customer or merchant retention, free cash flow maximisation. The brokerage added that regulatory challenges, including its impact on loan growth, remain key risks.
The brokerage factored in a compound annual growth rate of about 23% in gross merchant value between FY25 and FY28, as compared with a 66% CAGR over FY21-24. It added that GMV growth in FY25 stood at 3% owing to regulatory impact.
"Net payment take rates excluding UPI and subscription incentives were estimated at around 2.9, 3.3 and 3.6 basis points for FY26, FY27 and FY28. We estimate UPI incentives of ₹0.7 billion in FY26/27/28, similar to FY25," the brokerage said.
Subscription revenue is forecast to scale up to ₹1,390 crore, ₹1,670 crore and ₹1,950 crore across FY26–28, significantly higher than the ₹670 crore recorded in the first half of FY26.
Income from financial services is expected to rise to ₹2,510 crore in FY26, ₹3,210 crore in FY27 and ₹3,970 crore in FY28, up from ₹1,180 crore in H1 FY26. The growth outlook factors in not just loan distribution but also emerging streams such as postpaid offerings.
Marketing services are projected to expand at roughly 12% between FY25 and FY28. Meanwhile, contribution margins—excluding UPI incentives—are seen settling at about 58%, 57.4% and 57.3% for FY26–28, compared with 59.3% in the first half of FY26.
Paytm's Q2 FY26 Financials
Paytm showed strong improvement in profitability alongside solid revenue growth in the second quarter of the financial year 2025. During the quarter, Paytm's operating revenue rose 24 % year-on-year to ₹ 2,061 crore, driven by continued growth in its payments and financial services businesses.
The company reported a profit after tax (PAT) of ₹ 211 crore, before a one-time charge for full impairment of ₹ 190 crore loan to our JV, First Games Technology Pvt Ltd. Reported PAT stood at ₹ 21 crore. The result marks a significant improvement from the previous quarter, underscoring Paytm’s progress towards sustainable profitability.
EBITDA improved to ₹ 142 crore, with a 7 % margin, on account of revenue growth and operating leverage. Contribution profit grew 35 % year-on-year to ₹ 1,207 crore, with a healthy 59 % margin, driven by higher net payment margins and an increased share of financial services revenue.
Paytm’s payment services revenue rose 25 % year-on-year to ₹ 1,223 crore, while net payment revenue increased 28 % to ₹ 594 crore. Gross Merchandise Value (GMV) surged 27 % year-on-year to ₹ 5.67 lakh crore, supported by improved processing margins on account of higher growth of credit cards on UPI and affordability offerings (such as EMI).
The company’s merchant ecosystem continued to expand, with subscriptions reaching an all-time high of 1.37 crore, up 25 lakh year-on-year, reinforcing Paytm’s leadership in omni-channel merchant payments.
Its revenue from the distribution of financial services jumped 63 % year-on-year to ₹ 611 crore, led by robust merchant loan disbursements and improved collection performance experience for lending partners.
