Why Has Axis Capital Upgraded Paytm to Buy with a ₹1,500 Target?
Axis Capital has upgraded Paytm to BUY (from Reduce) and raised its target price to ₹1,500 (from ₹950). The brokerage expects a sharp improvement in profitability driven by margin expansion in payments, rapid growth in financial services, and disciplined cost control. EBITDAM is projected to reach nearly 15% by FY28 compared with 3.7% in Q1 FY25.
The brokerage highlights Paytm’s omnichannel presence—spanning online, enterprise, and small-merchant ecosystems—as a key differentiator. Its established merchant relationships and platform scale provide a strong foundation for future revenue diversification and steady operating leverage.
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Axis Capital notes that Paytm’s renewed management focus has shifted from stabilization to sustainable growth, with fresh investments in frontline staff and product development. The brokerage also points out multiple optionalities, including MDR expansion on UPI and the scale-up of BNPL services, that could drive further valuation re-rating.
Improved operating efficiency and disciplined cost control are expected to lift cash flows, while the company’s strong brand recall and diversified financial ecosystem enhance visibility in India’s fast-growing digital payments landscape.
With a clear path toward profitability and potential monetization of merchant lending partnerships, Paytm could emerge as a major fintech turnaround story over the next three years.
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Valuation re-rating hinges on consistent growth in payment volumes, controlled credit costs in lending partnerships, and sustained expansion in high-margin verticals. The brokerage expects Paytm to generate free cash flow by FY27, marking a structural improvement in its business model.
Investor Takeaway: Indian-Share-Tips.com Nifty & Derivatives Expert Gulshan Khera, CFP®, who is also a SEBI Registered Investment Adviser and Tiger Technical Analyst at Indian-Share-Tips.com, observes that Paytm’s focus on profitability and non-linear growth drivers positions it as a compelling fintech opportunity for long-term investors seeking quality exposure in digital financial services.
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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment adviser before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
