Goldman Sachs, BofA raise Paytm target price, Bernstein, Citi, Axis Capital remain upbeat

BofA, revised its target price on Paytm to ₹950, from ₹905 apiece earlier, as the company's 3Q earnings beat its consensus estimates. "We remain confident that Paytm's momentum will be strong both in the personal and merchant loan segment," it said.

The brokerage firm reiterated a 'buy' rating on the Paytm stock.

"We are optimistic on fundamentals and see room for Paytm to scale up aggressively without taking any balance sheet risks. Paytm has key differentiating factors versus peers, and overall competition remains benign. In our view, the lending business provides an upside optionality to Paytm giving Paytm room to scale up subject to execution," it added.

Goldman Sach has also revised the target price to ₹860, as it said that Paytm's broad-based growth across all segments was driven by seasonality.

"We have been encouraged by the stable credit metrics across Paytm’s different segments which in our view should position the company well when macro improves," it added.

Domestic brokerage firm Dolat Capital remained upbeat on the fintech giant's stock, with a buy rating and target price at ₹1,320 apiece.

"Continued strength across segments, early success in high ticket size loan distribution, and healthy operational performance reiterates our positive stance," it said.

It noted that Paytm has stated the use of AI to build products, as well as internal efficiency leading to moderate headcount and better operational performance in the near term.

"We factor in continued optimism in Merchant business, higher ticket size focus in the loan distribution business and steady consumer business," it added.

Bernstein maintained an 'outperform' rating with a target price of ₹950, as it said that the asset quality of Paytm's lending portfolio remained unchanged despite the slowdown in disbursal which is a major positive.

Citi said that overall, strong headline growth in revenues and contribution profits highlights the resilience of Paytm’s payments-driven cross-sell/up-sell opportunities in fintech.

Axis Capital maintained an 'add' rating with a price target of ₹860 apiece.

While Macquarie, in its note, stated, "Paytm reported EBITDA (excluding ESOP costs) of ₹219.4 crore, up 43% QoQ, surpassing our estimate of ₹60.6 crore, driven by increased revenues (12% above expectations) from financial services (rapid expansion of high-ticket personal loans), payments, and commerce revenues (boosted by the festive season). This was partially mitigated by higher processing charges and other expenses."