Shares of One 97 Communications, parent firm of Paytm, climbed over 4% to Rs 1,501 today after a key brokerage upgraded its target price. This follows the company's first-ever full-year net profit of Rs 552 crore for FY2026, marking a significant recovery from the losses reported in the previous fiscal year.
Shares of One 97 Communications, which operates the Paytm brand, saw positive momentum in Monday's trading session. The stock rose approximately 4% to reach Rs 1,501, driven by a note from brokerage firm Bernstein. Notably, this is the first time the brokerage has assigned a target price to the stock that exceeds its original IPO price, signaling a shift in market perception regarding the company’s future value.
This stock movement comes on the back of a major turnaround in the company’s financial health. For the full fiscal year 2026, Paytm reported a net profit of Rs 552 crore, a stark improvement from the net loss of Rs 663 crore recorded in FY2025. The company's top-line growth also remained steady, with annual operating revenue climbing 22% to reach Rs 8,437 crore.
Several factors have contributed to this change in financial trajectory. The company has focused on scaling its high-margin financial services distribution business while simultaneously implementing stricter cost-control measures. By reducing expenses related to marketing and staff, Paytm has been able to improve its operating profitability.
Despite these improvements, the company continues to operate in a challenging environment. The regulatory landscape remains a primary area of focus for investors, particularly following past actions taken against Paytm Payments Bank, which impacted the firm’s operational model. Additionally, the digital payments sector in India remains highly competitive, requiring the company to continuously innovate and invest in merchant acquisition to defend its market share.
A key part of Paytm's current business model is its reliance on third-party banking partners for its lending and payment infrastructure. Because the company has moved to a distribution-led model, its ability to maintain these partnerships effectively is essential for sustained growth. Investors tracking the company will likely look for updates on how the management plans to navigate these regulatory requirements while keeping their profit margins stable in the coming quarters.