Now Reading: Bernstein upgrade drives Paytm stock to 52-week high
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Bernstein upgrade drives Paytm stock to 52-week high
Paytm shares surged over 10% on August 10 to a fresh 52-week high of ₹1,594.80 after Bernstein upgraded the stock to 'Outperform' with a target price of ₹2,200. The brokerage has factored…
The Story in Brief
Paytm shares surged over 10% on August 10 to a fresh 52-week high of ₹1,594.80 after Bernstein upgraded the stock to 'Outperform' with a target price of ₹2,200. The brokerage has factored potential UPI Merchant Discount Rate (MDR) monetisation into its base-case estimates from FY28, expecting it to lift Paytm's net payment margins by 3-4 basis points and boost FY30 EPS by 30%. Bernstein estimates MDR could add around ₹2,200 crore to EBITDA by FY30.
The rally follows the Lok Sabha's passage of amendments to the Payment and Settlement Systems Act, creating an enabling framework for MDR on certain merchant transactions. The finance ministry clarified that consumers will not be charged and that any MDR would apply only above a threshold at nominal rates. Paytm recently reported a 79% YoY jump in Q1 FY27 net profit to ₹220 crore and record EBITDA of ₹203 crore.
The Indian Opinion
The cheer over Paytm's latest rally and Bernstein's target of ₹2,200 masks a deeper question: can a single regulatory event, UPI MDR, justify such a leap when the government has only passed an enabling provision, not a firm timeline? One broker's forecast of a 30% EPS boost from FY28 is being treated as certainty, yet competition among payment apps may squeeze any margin gains. The real test is not today's stock price but whether Paytm can sustain its recent profit growth without relying on a fee that may never arrive at the scale assumed.
Source: inc42.com
This story was synthesised by AI from the source linked above.
