Bernstein Bullish on Paytm: Sets Rs 1,100 Target, Sees Clear Profit Path

New Delhi: Global investment firm Bernstein has reaffirmed its confidence in Paytm (One97 Communications Ltd), maintaining an 'Outperform' rating with a 12-month target price of Rs 1,100—a 27% upside from current levels. In its latest report, 'Paytm: What Do You Need to Believe Now?', Bernstein highlights the fintech giant's resilient recovery and clear path to profitability.

Key Takeaways from Bernstein’s Report
Strong Financial Recovery

Paytm has nearly reached break-even after regulatory challenges in early 2024.

Earnings Per Share (EPS) projected to surge from ?1.5 (FY26E) to ?70 (FY30E).

Revenue Growth & Cost Control

22% revenue CAGR (FY25–30) driven by high-margin lending.

Cost discipline: Total expenses to rise at just 13?GR, with indirect costs limited to 10?GR.

Lending Business to Fuel Expansion

Merchant & personal loans expected to grow 3.6x from FY24 levels.

Merchant Business Thriving

UPI merchant share remains stable, supporting payments revenue.

Fee-paying merchants & loan volumes now exceed pre-regulatory levels.

Potential Growth Catalysts

Payment Aggregator (PA) license approval

Revival of Paytm Payments Bank (PPBL)

Reintroduction of wallet & BNPL services

Consumer Segment Rebound

Marketing revenue expected to grow at 15?GR, aided by recovering Monthly Transacting Users (MTUs).

Stock Performance & Outlook
Paytm shares have already surged 103.5% in the past year.

Bernstein sees the company "well-positioned for a strong comeback" with sustainable profitability.

Final Verdict:
With disciplined cost management, a thriving merchant ecosystem, and a rebound in lending, Paytm appears set for a profitable future. Bernstein’s ?1,100 target reflects strong conviction in its growth trajectory.

With inputs from IANS