Paytm Beats Revenue Estimates on Strong 4Q; Motilal Oswal Keeps Neutral, ₹1300 Target

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AuthorKavya Nair|Published at:
Paytm Beats Revenue Estimates on Strong 4Q; Motilal Oswal Keeps Neutral, ₹1300 Target
Overview

Paytm's parent company, One 97 Communications, reported robust 4QFY26 revenue growth of 18% year-over-year, exceeding expectations. The company also posted adjusted profit largely in line with forecasts. Motilal Oswal reiterated a Neutral rating with a ₹1,300 price target, pointing to growth in financial services and merchant lending partnerships.

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Strong Revenue Growth in 4QFY26

Paytm's parent company, One 97 Communications, announced stronger-than-expected revenue for the fourth quarter of fiscal year 2026. Revenue jumped 18% year-over-year and 3% from the previous quarter to ₹22.64 billion. This performance surpassed analyst expectations by 4%, driven by solid growth in gross merchandise volume (GMV) and increasing market share in both consumer and merchant payment services. The financial services segment also saw continued expansion.

Financial Services Showcases Strength

The financial services division was a key growth engine, with revenue climbing 38% year-over-year and 12% sequentially. This impressive growth stems from successful merchant lending partnerships, showcasing Paytm's evolving role beyond basic payment processing. The company reported adjusted profit after tax (PAT) largely in line with expectations, reaching ₹1.6 billion.

Analyst Outlook and Valuation

Looking forward, Motilal Oswal anticipates Paytm's adjusted profit after tax (PAT) to reach ₹8.3 billion in FY27 and ₹17.9 billion in FY28. The brokerage firm has reaffirmed its Neutral rating for One 97 Communications, setting a price target of ₹1,300 per share. This target is derived from a multiple of 22 times projected FY30E EBITDA, discounted back to September 2027. This valuation is roughly equivalent to 7.6 times anticipated sales for the same period.

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