Investec has reiterated its positive stance on One 97 Communications, the parent of Paytm, highlighting the company’s expanding “digital toll road” across payments and merchant services as a key long-term growth driver.
The brokerage sees scope for further upside as Paytm scales monetisation across its vast network of devices and transactions, even as near-term concerns linger around regulatory incentives.
The stock closed flat at ₹1144.35 on the BSE on Tuesday.
According to the brokerage, Paytm is well placed to benefit from rising credit-linked payments, strong operating leverage and oligopolistic market structures, and it forecasts a 23 per cent revenue CAGR with EBITDA margins expanding to 24 per cent by FY28, prompting a buy rating on the stock at ₹1,550 target price (a 35 per cent upside potential from current levels).
However, it flagged regulatory uncertainty, rising competition and potential asset-quality stress in merchant and consumer loans as key risks.
Another brokerage JM Financial said Paytm’s stock recently corrected sharply after market worries emerged over the status of the Payment Infrastructure Development Fund (PIDF) incentive, following references in a draft prospectus filed by a private player.
“Considering the sharp 9.5 per cent single-day correction, we find the reaction premature, having already factored-in a permanent termination,” it said. The scheme, which was due for renewal in December 2025, has not yet been formally extended, though JM Financial noted that there has been no official communication from the RBI.
Meanwhile, Jefferies earlier pointed out that Paytm’s profits will take a hit if the PIDF incentive scheme is not renewed. It slashed adjusted EBITDA estimates by 14 per cent for FY27 and 8 per cent for FY28, and reduced its price target to ₹1,450 from ₹1,600, maintaining buy call.
JM Financial believes Paytm could deploy offsetting measures such as higher monetisation and tighter sales execution, reducing the potential earnings impact to about 11 per cent in FY27 and 5 per cent in FY28.
It now expects Paytm to post EBITDA of ₹25.9 billion in FY28, slightly lower than its earlier estimate, but still strong enough to support rapid profit expansion. The brokerage reiterated its buy call with a March 2027 target price of ₹1,740.
On Friday, One 97 Communications said the company had recognised incentives under the RBI’s scheme for qualifying expenditure on deploying payment acceptance devices such as soundboxes and EDC machines, particularly in Tier-3 to Tier-6 centres, the north-eastern states and the Union Territories of Jammu, Kashmir and Ladakh.
The incentive, valid until December 31, 2025, amounted to ₹128 crore for the six months ended September 30, 2025.
Paytm added that, as of now, there has been no announcement from the RBI or other authorities regarding an extension or replacement of the scheme. In the event that it is not renewed, the company said it expects to significantly offset the impact over time through a mix of higher revenues and more targeted sales efforts.
Published on January 27, 2026
