In Short
- Paytm target hiked to Rs 1,400; Dolat retains ‘Buy’ rating
- Q1FY26 marks first PAT, EBITDA profit without one-offs
- Revenue up 28%, contribution margin improves to 60%
India’s leading full-stack merchant payments platform, Paytm, has received a significant vote of confidence from Dolat Capital, which has raised the stock’s target price to Rs 1,400, up from Rs 1,200, while maintaining a strong ‘Buy’ rating.
The new stock pricing implies that the Noida-based firm will be valued at 63-times of FY27-ended earnings. This revised valuation reflects the brokerage’s positive view of Paytm’s structural profitability journey, operating leverage, and robust performance in its core business segments.
“Paytm’s revenue traction led by perfect operational execution amid cost optimisation initiatives was creditable. We believe that improvements in the credit cycle, sustained merchant additions, and the revival of ‘Rent on Credit Card (CC)’ will act as key growth levers,” said the analyst firm.
Dolat Capital added that Q1FY26 marked the first quarter of profitability at both the EBITDA and PAT levels, achieved without any one-off elements or gains, underscoring the quality and sustainability of the results.
The analyst firm highlighted Paytm’s efficient execution and disciplined cost control as key drivers behind its solid revenue momentum. It sees additional upside from improving loan market conditions, ongoing merchant acquisition, and renewed traction in credit card-based rent payments.
“We believe that improvements in the credit cycle, sustained merchant additions, and the revival of ‘Rent on CC’ will act as key growth levers,” noted the brokerage firm.
In Q1FY26, Paytm reported a PAT of Rs 123 crore and EBITDA of Rs 72crore, respectively. The company’s operating revenue rose 28% YoY to Rs 1,918crore while the contribution profit increased 52% YoY to Rs 1,151 Cr with the contribution margin improving to 60%.
Financial Services revenue grew 100% YoY to Rs 561 Cr, driven by continued expansion in merchant loans, trail revenue from Default Loss Guarantee (DLG) portfolio, and improved collection performance.
