Brokerages have turned more optimistic on Paytm after its Q1FY26 results surpassed expectations, marking a turnaround in profitability and operating leverage. While Jefferies and Citi have raised their target prices and reiterated bullish views, Bernstein has highlighted the quality of the profit delivery while maintaining a cautiously optimistic stance.
Jefferies upgraded Paytm to a Buy and raised the target price to ₹1,250 per share, implying a 19% upside from the current market price of ₹1,053.10. The brokerage said Q1FY26 EBITDA came in ahead of estimates, led by lower Direct Lending Group (DLG) costs and operating leverage benefits. Jefferies expects continued profit growth backed by revenue expansion and margin gains. It also noted that the stock trades at a discount to PB Fintech and sees room for compounding returns.
Citi maintained its Buy rating and raised the target price to ₹1,215. The firm cited a strong beat on adjusted EBITDA, driven by cost efficiencies and growing profit contribution from non-DLG segments. It added that Paytm’s merchant business remains strong, and the consumer segment is showing early signs of recovery.
Bernstein retained its Outperform rating with a target price of ₹1,100. It highlighted that Q1FY26 marked a milestone with a positive net profit, achieved without one-off gains. The improvement was largely driven by a reduction in ESOP expenses and lower marketing costs. Bernstein added that future profitability will depend on Paytm’s ability to deliver consistent sequential revenue growth.
Disclaimer: The brokerage views expressed above are solely those of the respective firms. This article does not constitute investment advice. Readers are advised to consult their financial advisor before making any investment decisions.
