Paytm stock: Goldman reiterates Buy, sees 22% upside

Goldman Sachs keeps Buy and ₹1,400 target

Goldman Sachs reiterated its “Buy” rating on Paytm (One 97 Communications Ltd.) and set a target price of ₹1,400. The brokerage said the target implies an upside of around 22% from current levels. The call is anchored on Paytm’s market share recovery across consumers and merchants, and what it described as limited fallout from the Reserve Bank of India’s action against Paytm Payments Bank Ltd (PPBL), an associate entity.

The brokerage also noted that the regulatory development is an incremental negative mainly from a sentiment standpoint, but said there is no direct financial impact on Paytm. Paytm has stated in exchange disclosures that it has no exposure to, or material business arrangements with, PPBL.

Why PPBL’s licence cancellation matters to investors

The RBI cancelled PPBL’s banking licence on April 24, 2026. The order revoked the licence under Section 22(4) of the Banking Regulation Act, 1949, effective from the close of business on April 24, 2026. The RBI said the bank’s affairs were conducted in a manner detrimental to the interest of the bank and its depositors, and that the general character of management was prejudicial to depositors and public interest.

The regulator also indicated it would make an application before the High Court to wind up the bank. PPBL is prohibited from conducting any banking business, or other activities permitted under the Act, with immediate effect.

Paytm’s stated separation from PPBL

Goldman Sachs argued that the implications for Paytm are limited because the fintech has “effectively decoupled” from PPBL over the past two years. It highlighted that Paytm had already impaired its entire investment in PPBL in early 2024, and that it currently derives no revenue from PPBL’s operations.

Paytm has also told exchanges that its investment in PPBL was impaired as of March 31, 2024. The company has said none of its services are provided in partnership with PPBL, and that core offerings such as the Paytm app, UPI, Paytm Gold, merchant QR, Soundbox, card machines, payment gateway and Paytm Money continue to operate.

TPAP licence and UPI migration to partner banks

A key element of continuity has been Paytm’s migration away from PPBL-linked rails. Goldman Sachs pointed to Paytm securing a Third Party Application Provider (TPAP) licence from the National Payments Corporation of India (NPCI) in March 2024. After that, Paytm migrated its UPI handles to partner banks.

Goldman also said Paytm and PPBL have had no common management or board members for the past two years. It added that the language of the regulator’s order is consistent with the Banking Regulation Act, indicating a procedural closure rather than a fresh escalation.

UPI market share recovery: 6.5% by value in March 2026

Goldman Sachs cited NPCI data showing Paytm’s UPI market share by value rising to 6.5% in March 2026. This was up from 6.2% in December 2025 and 5.4% a year earlier, which the brokerage described as a steady, sustained recovery.

For Paytm, UPI share matters because it signals whether the platform is regaining transaction flows after a period of regulatory scrutiny around PPBL. The brokerage’s view is that the consumer side metrics are improving in a measurable way.

Merchant traction: app download share returns to 2023 levels

On the merchant side, Goldman Sachs cited SensorTower data indicating Paytm’s merchant app download market share has been steadily improving. It said Q4 FY26 market share is back to 2023 levels, which it read as a full recovery in merchant engagement.

Merchant traction is important for Paytm’s payments and distribution footprint, since merchants are a key channel for acquiring repeat transactions and cross-selling other offerings.

Q4 FY26 operating expectations: GMV up 26% YoY

Goldman Sachs expects another quarter of strong operational performance in Q4 FY 2026. It projected GMV, also referred to as total transaction value, to grow nearly 26% year-on-year in Q4. That compares with 23% year-on-year growth in Q3.

The brokerage also flagged a near-term revenue headwind due to the absence of Payments Infrastructure Development Fund (PIDF) incentives. Even so, it expects underlying EBITDA performance to hold up, with EBITDA margin projected at 5.8%.

Financial services remains the strongest vertical

Goldman Sachs said financial services should remain Paytm’s strongest vertical in Q4. It projected revenue growth for the segment at 33% year-on-year in Q4, broadly matching the 34% year-on-year pace in Q3.

It also pointed to Paytm’s Default Loss Guarantee (DLG) disclosures as evidence of returning lending momentum. The brokerage said the outstanding loan book is expected to accelerate to 11% quarter-on-quarter growth in Q4, up from 2% quarter-on-quarter growth in Q3.

Regulatory comfort signals from late 2025 approvals

Goldman Sachs highlighted that the regulator granted Paytm payment aggregator authorisation for both online and offline merchants in November and December 2025. It described these approvals as a strong signal of continued regulatory comfort with Paytm’s core business.

This point matters because the RBI’s PPBL action has created uncertainty for parts of the Paytm ecosystem. The brokerage’s argument is that the most recent authorisations relate directly to Paytm’s core merchant payments activities.

Stock moves and brokerage targets in focus

Paytm shares fell sharply after the RBI action, with reports of the stock tanking around 8% on Monday, before rebounding later in the day. In the last trading session referenced, the stock declined 1.10% to close at ₹1,147.10, compared with the previous close of ₹1,159.85, and was still down around 1.5% at one point.

Other brokerages also maintained positive stances in the coverage cited. Jefferies maintained a “Buy” with a base case target of ₹1,350, with an upside scenario target of ₹1,550 and a downside scenario of ₹980. Goldman Sachs maintained “Buy” but reduced its target to ₹1,400 from ₹1,470.

Key numbers from the brokerage note

Timeline of PPBL regulatory actions mentioned

What to watch next

Investors will track whether Paytm’s market share gains in UPI and merchant engagement sustain through Q4 FY26, alongside the effect of missing PIDF incentives on near-term revenue. The company has also indicated it is awaiting RBI approval for a Prepaid Payment Instrument (PPI) licence, which is tied to the potential relaunch of its wallet business.

For now, Goldman Sachs’ view is that Paytm’s core business momentum remains intact, supported by improving operating metrics and a separation from PPBL that was executed before the latest RBI action.