Paytm’s Comeback Story Gains Steam As Jefferies Hikes Target Price To INR 1,420

Few companies in India’s startup ecosystem embody the highs and lows of ambition quite like Paytm. Once the poster child of India’s digital payments revolution, One97 Communications—the parent company of Paytm—has lived through dazzling success, bruising criticism, and a dramatic fall from grace post its much-hyped IPO in November 2021. But if the latest note from global brokerage Jefferies is anything to go by, the tide may finally be turning in favor of the Vijay Shekhar Sharma-led fintech giant.

Jefferies has raised its price target (PT) for Paytm to INR 1,420, while maintaining its BUY rating. The revised outlook signals a nearly 19% upside from the stock’s recent close at INR 1,197.10 on the BSE (September 22). For a stock that had once been written off by skeptics, this bullishness suggests a renewed confidence in Paytm’s fundamentals.

From IPO Euphoria To Harsh Reality

When Paytm listed in 2021, it was India’s largest-ever IPO, raising ₹18,300 crore. The listing was meant to cement its place as a fintech juggernaut. Instead, it became one of the most infamous debuts in Indian stock market history, as shares nosedived more than 27% on day one. Investors questioned its business model, profitability timelines, and dependence on cash-burning growth.

In the months that followed, Paytm was caught between regulatory scrutiny, skepticism about its lending arm, and pressure from both the market and analysts. Its stock at one point traded at less than half its issue price, making it the poster child for startup overvaluation.

But over the last year, Paytm has quietly been rebuilding its narrative—cutting costs, focusing on profitable verticals, and demonstrating operational discipline.

Jefferies’ Optimism: Profits On The Horizon

In its latest report, Jefferies projects that Paytm’s EBITDA will swing from a loss of INR 1,500 Cr in FY25 to a profit of INR 500 Cr in FY26, and further to INR 1,200 Cr in FY27. The brokerage attributes this turnaround to lower operating expenses, stable contribution margins (~58%), and growing revenue from lending and financial services.

Jefferies sees potential upsides from multiple fronts:

• Lending momentum: Paytm’s lending business continues to scale, leveraging its 45 Mn-strong merchant base.

• BNPL (Buy Now Pay Later): Its new postpaid-on-UPI product could significantly boost financial services revenue. Even at one-third of its past peak adoption, Jefferies estimates a 7% upside to FY27 EBITDA.

• Wealth management: Through Paytm Money, it is building a base across trading, mutual funds, gold investments, and margin financing (already holding a book of INR 350–400 Cr).

• Customer recovery: Paytm’s active consumer base, once at 100 Mn and then hit hard during its downturn, has recovered to nearly 75 Mn—despite lower marketing spends.

Jefferies forecasts a 24% revenue CAGR between FY25–28, led by financial services (+33%) and payments (+24%). As operating leverage kicks in, Paytm’s EBITDA margins could climb to 15% by FY28—a stark contrast to the loss-heavy days investors were once accustomed to.

Industry Confidence Builds

This isn’t the first brokerage to turn positive on Paytm. Just a month ago, Bernstein also raised its target price to INR 1,200 from INR 1,100, with an ‘outperform’ rating.

The growing optimism follows Paytm’s first profitable quarter in Q1 FY26, where it posted a consolidated net profit of INR 122.5 Cr versus a loss of INR 840.1 Cr a year earlier. Operating revenue surged 28% to INR 1,918 Cr from INR 1,502 Cr in Q1 FY25.

The fintech major has also been addressing pain points—shutting down unprofitable businesses, easing regulatory challenges, and even relaunching BNPL in partnership with Suryodaya Small Finance Bank. Its investment arm, Paytm Money, recently received an infusion of INR 300 Cr to scale wealth-tech offerings.

Market Rewards The Comeback

The market has taken notice. Paytm’s stock has climbed 37% in the past three months and is up nearly 18% YTD. For long-suffering retail investors, this rally marks a rare moment of vindication after years of underperformance.

For Paytm, the story is no longer about being the flashiest fintech in town—it is about discipline, profitability, and execution. While challenges remain, from navigating regulatory guardrails to fending off competitors like PhonePe, Google Pay, and Cred, Jefferies’ call suggests that Paytm is steadily regaining credibility on Dalal Street.

If the projections hold true, Paytm may well transform from being the cautionary tale of India’s startup IPO frenzy into a case study of resilience and revival.