Paytm Buy Calls After RBI Action: Targets ₹1,265-₹1,550

Why Paytm is back in focus

Paytm (One 97 Communications Ltd.) has remained in the spotlight after the Reserve Bank of India cancelled the payments bank licence of its associate entity, Paytm Payments Bank Ltd. (PPBL). The regulatory action raised near-term questions around sentiment and continuity for users, even as brokerages argued that the core listed-company operations remain insulated.

In this context, multiple global and domestic brokerages reiterated positive views on the stock, publishing target prices that range from ₹1,265 to ₹1,550. The common thread across these notes is that the perceived impact is limited due to ring-fenced operations and earlier operational changes such as wallet shutdown and UPI migration.

Goldman Sachs reiterates Buy, sees 22% upside

An ANI report dated April 27 said Goldman Sachs reiterated a “Buy” rating on Paytm with a target price of ₹1,400. The brokerage said this implied an upside of about 22% from prevailing levels at the time of the note.

Goldman Sachs linked its constructive stance to continued market share gains across both consumers and merchants. It also flagged limited fallout from the cancellation of PPBL’s banking licence, arguing that the regulatory action should not create a direct financial impact on Paytm’s business because operations are ring-fenced.

Q4 FY2026 operating outlook: GMV growth seen near 26%

Goldman Sachs expects another quarter of strong operational performance in Q4 FY2026. It projected gross merchandise value (GMV), also referred to as total transaction value, to rise nearly 26% year-on-year in Q4, compared with 23% year-on-year growth in Q3.

On the merchant side, the brokerage cited SensorTower data to indicate Paytm’s merchant app download market share has been steadily improving. It added that Q4 FY2026 market share was back to 2023 levels, which it interpreted as a recovery in merchant engagement.

Financial services remains the key growth vertical

Goldman Sachs expects financial services to be Paytm’s strongest vertical. It forecast revenue growth of 33% year-on-year in Q4, broadly in line with 34% year-on-year growth in Q3.

The brokerage also pointed to a near-term revenue headwind due to the absence of PIDF incentives. Even with that headwind, it said underlying EBITDA performance should hold up, with an underlying EBITDA margin of 5.8%.

Lending momentum: loan book growth accelerates

A key data point in the Goldman note was based on Paytm’s Default Loss Guarantee (DLG) disclosures. Goldman said the outstanding loan book accelerated sharply to 11% quarter-on-quarter growth in Q4, compared with 2% quarter-on-quarter growth in Q3.

The brokerage read this as a sign that lending momentum is returning. It also maintained that Paytm should stay EBITDA positive, with underlying margins improving as scale increases.

Other brokerages: Jefferies, Bernstein, Investec, Macquarie

Jefferies maintained a “Buy” rating with a revised target price of ₹1,350, lowered from ₹1,400. It expects about 20% revenue growth and EBITDA margin expansion driven by operating leverage, network expansion, faster loan origination and new segments.

Jefferies also noted near-term concerns, including a 20-30% year-to-date stock decline, and said contribution sensitivity could impact adjusted EBITDA by about 9-6%.

Bernstein and Jefferies both maintained a positive outlook after the RBI action, emphasising that impact is limited due to prior wallet shutdown, UPI migration, completed write-offs and a governance reset, while core Paytm services continue unaffected.

Separately, Investec initiated “Buy” coverage with a target price of ₹1,550, projecting a 23% revenue CAGR and margin expansion. Macquarie upgraded Paytm from “Underperform” to “Neutral” and raised its target price to ₹1,265.

Paytm’s reported numbers: Q2 FY2026 revenue rises 24%

Paytm reported its Q2 FY2026 results with revenue growth of 24% year-on-year to ₹2,061.00 crore. Broker notes in circulation reference continued traction in areas such as postpaid and loan distribution services, while still acknowledging near-term sentiment risk after the regulatory action.

Brokerage targets and key calls at a glance

Market impact: sentiment overhang, operations seen insulated

The RBI action has been treated as a sentiment event in the near term, with brokerages repeatedly flagging perception risk even when they see limited operational or financial spillover. Jefferies specifically referred to a 20-30% year-to-date decline in the stock, framing it as part of the near-term concern set.

At the same time, the bullish arguments focus on business continuity in Paytm’s core services. Brokerages cited factors such as ring-fencing, earlier migration efforts, and a governance reset as reasons they expect limited impact on day-to-day payments and financial services distribution.

Analysis: what the notes collectively signal

Across reports, the main analytical point is that Paytm’s investment debate is shifting back toward execution metrics like GMV growth, merchant engagement and financial services scale. Goldman’s expectation of higher GMV growth in Q4 FY2026 versus Q3 and its commentary on merchant app share recovery suggests it is watching for evidence of sustained usage and distribution strength.

The second theme is operating leverage. Jefferies’ expectation of EBITDA margin expansion and Goldman’s view that margins should improve with scale both anchor on cost discipline and revenue mix, while still acknowledging that incentives such as PIDF can create near-term noise in reported revenue.

Conclusion: targets stay supportive as focus returns to execution

The latest brokerage commentary keeps Paytm in a broadly supported zone despite the PPBL licence cancellation, with target prices ranging from ₹1,265 to ₹1,550. Goldman Sachs’ Buy call with a ₹1,400 target rests on market share gains, a rebound in lending momentum, and the view that the RBI action has limited financial impact due to ring-fenced operations.

Near-term sentiment risks remain part of the narrative, but the next set of operating updates, including metrics around GMV, financial services growth, and loan distribution momentum, are positioned as the key checkpoints referenced by these reports.