Paytm Shares Could Soar 84%: Ventura Securities’ Bullish Outlook

Paytm’s Journey Toward Profitability

Since Ventura’s initiation of coverage in August 2024, Paytm has undergone significant transformation. The fintech major sharpened its focus on profitability, backed by both operational efficiency and strategic moves.

• Merchant Growth: The merchant base rose from 4.07 crore in Q1 FY25 to 4.5 crore in Q1 FY26.

• Payment GMV: Increased from ₹4.21 lakh crore to ₹5.34 lakh crore in the same period.

• Device Penetration: Expanded from 1.09 crore to 1.3 crore, strengthening recurring subscription revenues.

These metrics highlight Paytm’s growing dominance in India’s digital payments ecosystem.

Key Strategic Developments

Ventura emphasizes that Paytm is not only scaling payments but also diversifying into high-margin services.

1. Relaunch of Paytm Postpaid

   • Relaunched with Suryoday Small Finance Bank and powered by NPCI.

   • Aimed at capturing high-margin lending opportunities.

2. Rising UPI Market Share

   • Overall UPI market share improved to 7.3% in Q1 FY26 (from 7% a year earlier).

   • UPI person-to-merchant (P2M) share rose to 20.9% (from 20.4%).

3. Future Growth Projections

   • Monthly transacting users: expected to grow from 7.4 crore (Q1 FY26) to 9.5 crore (FY28E).

   • Device merchants: projected to expand from 1.3 crore to 2.2 crore over the same period.

   • Payment GMV: expected to nearly double from ₹18.7 lakh crore (FY25) to ₹33.9 lakh crore (FY28E).

Financial Outlook

Ventura forecasts robust growth in both revenue and profitability:

• Revenue CAGR (FY25–28E): 27.3%

• Contribution Profit CAGR: 30.8%

• Contribution Margin: To improve from 53.2% to 57.8%

• Post-ESOP EBITDA: Estimated at ₹2,164 crore by FY28E

• Net Profit: Forecasted at ₹2,138 crore by FY28E, marking a sharp turnaround from FY25 losses

Ventura notes that Paytm turned post-ESOP EBITDA positive in Q1 FY26, signaling its entry into a sustainable profitability phase.

Valuation and Target Price

At the current market price of ₹1,127, Paytm trades at 33.6x FY28 projected earnings. Ventura’s DCF-based target price of ₹2,074 implies 61.8x FY28 P/E — suggesting an 84% upside potential over the next 24 months.

The brokerage cites AI-driven operating leverage, disciplined cost structures, and expanding financial services as the main catalysts for this valuation.

Conclusion

Ventura Securities’ bullish outlook on Paytm highlights the fintech leader’s remarkable turnaround story. With growing merchant adoption, stronger recurring revenues, and diversification into financial services, Paytm appears well-positioned for long-term growth. If Ventura’s projections hold, Paytm could emerge as one of India’s most compelling fintech investments in the next two years.