Now Reading: Paytm shares hit 52-week high on Bernstein upgrade, target Rs 2,200
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Paytm shares hit 52-week high on Bernstein upgrade, target Rs 2,200
Paytm shares hit 52-week high on Bernstein upgrade, target Rs 2,200
Shares of One97 Communications, Paytm's parent, surged 10% to a fresh 52-week high of Rs 1,598 on Monday after global brokerage Bernstein upgraded the stock to 'Outperform' and raised its target price…
The Story in Brief
Shares of One97 Communications, Paytm's parent, surged 10% to a fresh 52-week high of Rs 1,598 on Monday after global brokerage Bernstein upgraded the stock to 'Outperform' and raised its target price to Rs 2,200 from Rs 1,500. The new target, a street-high, implies a 38% upside from the closing price. Bernstein has factored potential UPI Merchant Discount Rate (MDR) into its base-case forecasts from FY28, expecting it to improve Paytm's net payment margins by 3-4 basis points and boost FY30 EPS by 30%. The stock has recovered 70% from its March lows.
Paytm's Q1 FY27 net profit jumped 79% year-on-year to Rs 220 crore, while revenue rose 28% to Rs 2,448 crore. The finance ministry has clarified that any UPI MDR would apply only to limited merchant transactions above a threshold and that consumers will not be charged. The amendment is an enabling provision, not an automatic introduction.
The Indian Opinion
Bernstein's upgrade has reignited talk of UPI MDR as a surefire boost for Paytm, but the government has called it only an 'enabling provision' with no automatic rollout. Even if MDR arrives, competition among payment platforms could limit what Paytm retains. The stock has already priced in much optimism, rising 70% from March lows. The real test is whether Paytm can sustain profitability without MDR, its Q1 EBITDA margin of 8% is still thin. Watch for the actual timing and rate of any MDR introduction.
Sources (2): inc42.com, livemint.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
