Paytm has been included in Bernstein's India model portfolio following the brokerage's latest portfolio tweaks on Wednesday, August 19. According to CNBC TV18, Bernstein cited potential MDR-related catalysts as the key driver for including Paytm in its portfolio, despite the stock having already outperformed in recent months. The brokerage highlighted that the additions have been made to the portfolio despite some of them having outperformed in the recent months, reflecting Bernstein's focus on stocks with visible growth catalysts. Shares of Paytm have risen 15% in the last one month enroute to their 52-week high levels, though the stock still remains below its issue price of ₹2,150. As per Business Standard, Bernstein has also added Eternal and Adani Ports to its India model portfolio, while dropping Avenue Supermarts following its recent outperformance and growing risks from quick commerce. The three additions come from very different businesses - Adani Ports brings exposure to ports and logistics, Eternal to food delivery and quick commerce, and Paytm to digital payments.
According to reports from Live Mint, One97 Communications, Paytm's parent company, delivered its biggest weekly gain in four months with an 11% increase, reaching ₹1,603 and extending its strong recovery momentum. The stock has demonstrated remarkable resilience, rising 70% from its March low and closing each of the last four months in positive territory. This latest rally has further strengthened the stock's momentum following a period of easing regulatory headwinds and improving earnings visibility that had already revived investor interest. On Monday's trading session, shares rose as much as 4.5% to ₹1,506 after Bernstein raised its target price, with the revised target implying about 52% upside from current levels. However, Paytm shares closed 1.42% lower at ₹1,580.20 per share on Monday, as reported by NDTV Profit, though they remain up 17.23% in one month and 37.25% in the last one year.
Resilient Asset Management is set to sell up to 5% stake in One97 Communications through block deals on Tuesday, with the proposed transaction worth up to ₹4,900 crore. The floor price for the block deal has been fixed at ₹1,535 per share, representing a 3% discount to Paytm's current market price. The base deal size comprises around 19.2 million shares, while an additional 12.4 million shares could be sold through a greenshoe option. Goldman Sachs is acting as the banker for the transaction. Resilient Asset Management held a 10.2% stake in Paytm as of the quarter ended June, according to shareholding data, having acquired it from Antfin in 2023 against optionally convertible debentures. The proposed transaction could significantly reduce Resilient's holding if the full 5% stake is sold.
As reported by Live Mint, Bernstein raised its target price on Paytm to ₹2,200 from ₹1,500, while retaining its 'Outperform' rating. The revised target is significant because it is above Paytm's ₹2,150 issue price in its 2021 initial public offering, marking the first time the brokerage's target exceeds the company's IPO price. The stock debuted below that level and has not returned to its IPO price since its market listing. The target-price increase reflects Bernstein's decision to factor potential merchant discount rates on UPI transactions into its base-case forecasts from financial year 2028. The brokerage estimates that UPI monetisation could add 3-4 basis points to Paytm's net payments margin and lift its fiscal 2030 earnings per share estimate by about 30% from its earlier forecast. Bernstein's revised projections mark a shift in how it values Paytm's payments business, having previously treated UPI monetisation as an upside scenario but now incorporating it into core forecasts from FY28.
Paytm reported robust financial results for the quarter ended June 2026, demonstrating significant year-over-year growth across key metrics. The company achieved a consolidated net profit of ₹220 crore for Q1 FY27, compared with ₹184 crore in the previous quarter, representing a 20% increase quarter-on-quarter. Revenue from operations rose 8.1% sequentially to ₹2,448 crore from ₹2,264 crore, while also increasing 28% year-on-year from ₹1,918 crore. The company's EBITDA increased by 54% to ₹203 crore compared to the previous quarter's ₹132 crore, with EBITDA margin expanding to 8.3% from 5.8% in the quarter prior. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 54% to ₹203 compared to the previous quarter's ₹132 crore. The company has clocked a profit for the fifth straight quarter, as reported by NDTV Profit.
According to Live Mint, the optimism around Paytm's prospects has been fueled by the government's consideration of introducing a nominal merchant discount rate (MDR) on a limited set of UPI merchant transactions above a certain threshold, while keeping consumer and person-to-person payments free. Bernstein's revised projections assume a headline merchant discount rate of about 35 basis points on a portion of person-to-merchant UPI transactions, with the charge covering roughly half of UPI transaction value. This translates into an incremental 3-4 basis points of net payments margin for Paytm. The government has highlighted the need for a sustainable revenue model for UPI, given the continuing investment required for cybersecurity, fraud prevention and payments infrastructure. Bernstein cautioned that competition in merchant payments could limit the economics ultimately realised by payment platforms, meaning effective margins may be lower than the published MDR.
Paytm demonstrated strong operational growth across its payments ecosystem during Q1 FY27. According to CNBC TV18, merchant gross merchandise value (GMV) rose 31% year-on-year to ₹7.1 lakh crore during the June quarter, with growth accelerating from 27% in the March quarter and 24% in the December quarter. The company's customer Unified Payments Interface (UPI) gross transaction value (GTV) increased 45% year-on-year to ₹5.9 lakh crore, more than double the industry's 20% growth rate. Monthly transacting users (MTUs) increased by 60 lakh year-on-year to 8 crore, while the number of merchants on subscription plans rose by 27 lakh to 1.57 crore. The company's Soundbox network expanded to 1.57 crore storefronts, with 27 lakh net devices added year-on-year. Paytm also reported that it has started witnessing momentum in its online merchant business after receiving the online payment aggregator licence last year.
