Global investment bank Goldman Sachs has significantly upgraded its 12-month target price for One 97 Communications Ltd, the parent company of digital payments giant Paytm. The new target stands at ₹2,070, a 39% increase from the previous ₹1,500, with the firm reiterating its 'Buy' recommendation on the stock.
The revised outlook, issued on October 8, 2026, is primarily driven by enhanced earnings expectations. This includes the impact of the recently announced UPI Merchant Discount Rate (MDR) alongside Paytm's sustained strong market share, robust revenue growth, and expanding margin momentum.
Three Key Drivers for Paytm's Upgraded Outlook
Goldman Sachs highlighted three core reasons for its optimistic stance on Paytm's stock:
- Sustained Business Momentum: The brokerage noted Paytm's consistent strength in underlying market share, revenue growth, and margin expansion, anticipating these trends to continue.
- UPI MDR Impact: The recent introduction of UPI MDR is projected to lead to Ebitda (Earnings Before Interest, Taxes, Depreciation, and Amortization) upgrades of up to 40% for Paytm. Goldman Sachs believes this positive impact is not yet fully priced into the current share value.
- Strategic Optionalities: Future growth avenues include the scaling up of Paytm's postpaid lending business, the potential relaunch of its wallet services, and the upcoming December 2026 deadline for UPI market share caps, which could serve as a significant catalyst for the company.
The investment bank's analysis indicates that even without factoring in the UPI MDR, Paytm's Ebitda was already projected to more than double in fiscal year 2027 over 2026, and then double again in fiscal year 2028. With the inclusion of UPI MDR, Goldman Sachs now forecasts Paytm's FY28 EBITDA to be five to six times that of FY26, followed by approximately 30% Compound Annual Growth Rate (CAGR) until FY30.
This positive trajectory is attributed to steady market share gains in both consumer payments via UPI and merchant payments, particularly after the resumption of online merchant onboarding. Furthermore, a strategic shift towards higher-margin products within payments, the ramp-up of its postpaid offerings, and rigorous cost control measures have all contributed to the improved financial outlook.
Goldman Sachs views the risk-reward profile for Paytm's stock as positively skewed, suggesting a potential 50% upside in a bull-case scenario. The firm also observed that Paytm currently trades at a discount on a two-year forward EV/Ebitda basis compared to peers like Nykaa and Zomato (Eternal), despite exhibiting a similar or even stronger Ebitda growth profile.