Jefferies Reaffirms Bullish Outlook on Paytm, Ups Target Price to ₹1,600

Global brokerage Jefferies maintains its BUY rating on Paytm, boosting the target price to ₹1,600. The firm cited robust growth in core operations and increasing value in wealth, lending, and international segments. Paytm's expansion into new areas signals strong medium-term growth, according to Jefferies.

Global brokerage Jefferies has reiterated its positive outlook on One 97 Communications Ltd, better known as Paytm, keeping its BUY rating intact and elevating the target price to ₹1,600 from ₹1,420. The firm praised the company's "healthy core growth" and noted the "rising option value across wealth, lending, and international segments," thus confirming Paytm as its "preferred pick among fintechs."

Jefferies highlighted that Paytm is positioned to scale up new segments, utilizing its extensive distribution and customer base. Emerging opportunities in wealth products and early-stage international ventures were specifically mentioned as areas that will bolster substantial growth and enhance the margin profile. The brokerage noted a 24% rise in year-on-year revenues for the September quarter, driven by higher net take rates and stronger growth in financial services.

The report projected a remarkable 24% CAGR in revenues from FY25-28 and adjustments in the EBITDA margin from -10% to +18% by FY28, with GMV anticipated to increase annually by 24%. Jefferies accentuated the company's disciplined execution strategies, forecasting a PAT of ₹20 billion by FY28, supported by core revenue and profit growth. It concluded that Paytm's operational leverage, profitability, and new business lines firmly establish it as a "preferred pick among fintechs."

(With inputs from agencies.)