Shares of Paytm (One 97 Communications Ltd) opened nearly 3% higher at ₹1,081.40 on Wednesday, following a strong Q1FY26 performance and fresh bullish commentary from top brokerages. The stock hit a high of ₹1,089.00 in early trade and was last seen trading at ₹1,053.95, up 0.28% over the previous close.
Paytm posted a net profit of ₹123 crore in Q1FY26, a significant turnaround from a loss of ₹840 crore in the same quarter last year. Revenue jumped 28% year-on-year to ₹1,918 crore from ₹1,502 crore. The company also reported an operating profit for the first time, attributing the improvement to better cost management and operational leverage.
Management noted that margins could improve further, driven by scale and improved revenue mix.
Brokerage commentary post Q1FY26
Jefferies upgraded the stock to a Buy and raised the target price to ₹1,250. The brokerage highlighted that EBITDA beat estimates due to lower direct lending group (DLG) costs and improving operating leverage. It believes profit growth will continue, supported by revenue upside and margin expansion. Jefferies also pointed out that Paytm is trading at a discount to PB Fintech and offers potential for compounding returns.
Citi maintained its Buy rating and raised the target to ₹1,215. It called Q1 a strong beat on adjusted EBITDA, driven by cost efficiencies and profit contribution from non-DLG business. The merchant segment continues to perform well, and the consumer business is showing signs of recovery, Citi added.
Bernstein retained its Outperform rating with a target of ₹1,100. The firm noted that profitability in Q1 was achieved without any one-off gains and was supported by ESOP cost reduction and lower marketing spends. However, it cautioned that sustaining profitability will depend on consistent revenue growth over the coming quarters.
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.
