Shares of One 97 Communications, parent company of Paytm, rose by 3.4% to ₹1,325 on November 28, reaching a high of ₹1,336. This increase was driven by improved investor sentiment following a positive outlook from Goldman Sachs, which upgraded its rating on Paytm from ‘Neutral’ to ‘Buy’. Additionally, Goldman Sachs significantly increased its 12-month target price for the stock by 123%, raising it from ₹705 to ₹1,570.
In a positive forecast, the brokerage projects the stock price may reach ₹1,870 per share. In a highly optimistic scenario, they expect it could increase to ₹2,320 per share, indicating a potential upside of 79% from its most recent closing price.
The brokerage highlighted an improvement in the regulatory environment, which has historically negatively impacted the stock. This positive shift is anticipated to support early recovery signs in Paytm’s payments market share, enhance earnings visibility, and facilitate the relaunch of essential products.
Goldman Sachs noted that Paytm has faced three significant regulatory challenges in recent years: the online merchant onboarding ban in 2022, restrictions on unsecured lending imposed by the RBI in 2023, and the ban on Paytm Payments Bank (PPBL) in 2024. The firm believes these obstacles are largely resolved, and Paytm is starting to reclaim its market share.
Paytm’s market share in UPI and overall payments has shown signs of recovery in recent quarters. The company expects this positive trend to persist, particularly after receiving authorization as an online payment aggregator, and plans to intensify its customer acquisition strategies.
Overall, the brokerage anticipates 20–25% annual revenue growth for Paytm over the next 2–3 years. They have raised FY26–30 EBITDA estimates by at least 45%, leading to significant EPS upgrades. This positive outlook is attributed to improved cost control, reduced ESOP expenses following the founder’s decision to forgo his grants, and strong growth in high-margin devices and merchant lending.
Following a troubled IPO, the stock has significantly recovered, achieving strong monthly gains that have greatly benefited investors, particularly those who bought shares in the latter half of last year, tripling their investment. This resurgence is attributed to enhanced financial performance, which resulted from a renewed focus on core business operations, cost-reduction strategies, and the discontinuation of non-essential segments like ticketing, earning positive reactions from the market.
Paytm shares, after hitting a low of ₹310 in May 2024, have rebounded significantly, achieving a 327% increase. Over the past 18 months, the stock has seen positive performance in 15 months, including an 18% rise in July, indicating strong investor confidence and effective operational strategies.
