Paytm shares jump 11% in week as brokerages raise targets

Shares of One97 Communications, Paytm's parent, rose 11% this week to Rs 1,603, marking their biggest weekly gain in four months. The rally has been driven by optimism over a possible merchant discount rate (MDR) on select UPI transactions after the government cleared an enabling amendment in Parliament, Livemint and Business Today report.

Bernstein raised its target price on Paytm to Rs 2,200 from Rs 1,500, while JM Financial lifted its target to Rs 1,950 from Rs 1,500, citing potential earnings from UPI monetisation, according to Livemint. BofA Securities also raised its target to Rs 1,775 from Rs 1,560, retaining a 'Buy' rating and citing strong momentum in core businesses such as Soundbox, lending, and UPI market-share gains, Business Today adds.

JM Financial estimates incremental revenue of Rs 200 crore in FY27 and Rs 440 crore in FY28 from an MDR of 25 basis points applied to 30% of UPI gross merchandise value. However, both brokerages caution that the stock has already priced in much of the MDR buzz and that a lower-than-expected MDR or higher competition remain key risks. Mutual funds increased their stake in Paytm to an all-time high of 18% in the June quarter, up from 16.60% in March, Livemint notes.