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Emkay has also increased its price target on Paytm by 40% to ₹1,050 from ₹750 earlier. The revised price target from the brokerage implies a potential upside of 23% from Wednesday’s closing levels.
Emkay’s price target is well below Paytm’s recent peak of ₹1,062.95, which it hit on December 17 last year. The stock is down nearly 20% from those levels.
The brokerage believes the recent correction in Paytm’s stock offers an attractive entry point, given its reasonable valuations.
The brokerage wrote in its note that the recent NPCI approval has released a major regulatory overhang. This should help Paytm rebuild its MTU (Monthly Transacting Users) base over the next 12 to 18 months, enabling it to cross-sell retail financial products such as loans (e.g., home loans), insurance, and wealth management products, thereby improving revenue per user.
Emkay also noted that Paytm is on an early path to profitability, expected by the financial year 2026, with further acceleration beyond that.
Following the recent stake sale in PayPay Corp, the company’s Cash/MCap ratio stands at 21%, compared to 5% for Zomato. Emkay believes this provides a strong margin of safety, which can be utilised to accelerate business growth organically or inorganically, or even to reward shareholders through dividends or stock buybacks.
Additionally, further easing of regulatory stance via potential approval for payment aggregator license could be another near term positive catalyst.
The brokerage has upgraded its earnings estimates for FY26-31E by 20-40%, factoring in an improved revenue trajectory and cost optimization measures.
Out of the 19 analysts that have coverage on Paytm, eight of them have a ‘Buy’ rating, six say ‘Hold’ and five of them have a ‘Sell’ rating on the stock.
Shares of Paytm ended 4.54% higher on Wednesday at ₹855. Despite the upgrade, Emkay’s price target is 51% lower than Paytm’s IPO price of ₹2,150, while its current price is 60% below the issue price.
