Paytm shares climbed over 2% after global brokerage Investec initiated coverage on the stock with a Buy rating and a target price of ₹1,550 per share, signalling growing confidence in the company’s earnings trajectory and business fundamentals.
According to Investec, Paytm is entering a structurally stronger phase of growth, supported by deep technology capabilities and long-standing merchant relationships. These factors are seen as creating high switching costs for merchants, giving the company long-term pricing power across its payments, commerce, and credit-adjacent offerings. The brokerage believes this entrenched ecosystem provides Paytm with durable monetisation opportunities over the medium to long term.
Investec noted that Paytm has already completed the bulk of its merchant acquisition phase, a key milestone in the company’s evolution. With the core merchant network now largely established and a digital-first operating model in place, incremental revenue growth is expected to translate into disproportionately higher profitability. This operating leverage is seen as a major driver of margin expansion as revenues scale without a commensurate rise in fixed costs.
On the financial front, Investec expects Paytm to deliver a 23% net revenue CAGR over FY26–FY28E, driven by scale efficiencies and a rising share of higher-margin, credit-linked products. The brokerage forecasts a sharp improvement in profitability, with EBITDA margins, as a percentage of net revenue, projected to expand to 24% by FY28E, from 8% in 1HFY26. This improvement is attributed to better unit economics and a richer, more profitable business mix.
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