The share of fintech major Paytm surged over 2% to Rs 1,350.25 apiece in trade on Friday, October 7, after investors were positive over brokerage stance on the digital payment app’s stock.
This comes after the company’s inclusion in the MSCI India Standard Index alongside three other stocks.
The fintech stock had reached a record high of Rs 1,333.80 on Thursday’s trading session.
In a brokerage note, JM Financials noted,”With sustained strength in operating performance along with multiple growth optionalities, we find attractive risk-reward at CMP. Reiterate BUY with Sep’26 TP of INR 1,470, valuing Paytm at 40x Sep’27E EBITDA multiple.”
“Paytm continued its track record of delivering better than expected profits for another quarter with PAT (adjusted for exceptional items) reaching INR 21.1bn. Company reported INR 20.6bn revenue (+7% QoQ) with contribution margin (CM) maintained at 59%, at the higher range of guidance,” it said.
Payment services revenue stood at INR 12.2bn, +10% QoQ. Driven by rising mix of credit card on UPI and affordability solutions (EMI on POS), payment processing margin (PPM) improved to 3.58bps (as per JMFe), with management suggesting it to sustain and improve further.
In 2Q26, Financial Services revenue increased to INR 6.1bn vs. INR 5.6bn in 1Q26 (+8.9% QoQ, +63% YoY) mainly due to sustained growth in merchant loans due to strong retention (>50% of loans were issued to repeat borrowers).
The company’s management reiterated that AI is evolving from being a cost-efficiency enabler to a key revenue driver, with multiple monetisation opportunities emerging across merchant analytics, commerce cloud offerings and intelligent agentic products built on Paytm’s proprietary in-house GenAI model.
In 2Q, strong festive-season EMI demand improved net payment margins, however, management believes this to be structural in nature and expect margins to sustain. Management expects affordability products and credit-on-UPI usage to be key growth levers.
