Emkay has upgraded Paytm to a ‘Buy’ from ‘Add,’ increasing its target price to ₹1,050 from ₹750. The brokerage cites the recent NPCI approval as a key factor in removing a major regulatory overhang. This development is expected to help Paytm rebuild its Monthly Transacting User (MTU) base over the next 12-18 months, enabling cross-selling of retail financial products such as loans, insurance, and wealth offerings.
Paytm is also benefiting from strong momentum in merchant device subscription revenue, increasing UPI usage with MDR on credit cards, and an accelerating merchant loan business with improved take rates. Continued cost optimization and rising non-operational income, including treasury income from recent stake sales, further bolster its outlook.
Emkay expects Paytm to be on the early path to profitability by FY26, with acceleration thereafter. Paytm’s cash reserves, constituting 21% of its market cap (compared to Zomato’s 5%), provide a strong margin of safety and potential for business expansion or shareholder rewards. The brokerage also sees the potential approval of a payment aggregator license as a positive catalyst for the stock.
