Global brokerage Bernstein said that fintech pioneer Paytm's financial services distribution business was the standout of its June-quarter performance, with revenue up 45 per cent (year-on-year) to INR 814 crore
NEW DELHI — Global brokerage Bernstein said that fintech pioneer Paytm's financial services distribution business was the standout of its June-quarter performance, with revenue up 45 per cent (year-on-year) to INR 814 crore, as cross-sell of credit and other financial products continued to improve.
The brokerage maintained its ‘Outperform’ rating, with a price target of INR 1,500.
Bernstein said Paytm's Q1 FY27 results supported its investment thesis of "non-linear profit growth" driven by revenue growth and operating leverage. Revenue rose 28 per cent year on year while indirect expenses grew just 6 per cent, lifting EBITDA 182 per cent. On a comparable basis, excluding PIDF incentives, EBITDA rose nearly tenfold.
The brokerage also commended the fintech on continued cost discipline, despite showcasing strong growth. Platform-building costs fell 3 per cent year on year despite continued investment in artificial intelligence and product development, which Bernstein said gave it "greater confidence in the sustainability of this trend."
Payment volumes also stayed strong. Merchant GMV rose 31 per cent to INR 7.1 trillion, while consumer UPI payment value grew 45 per cent, more than twice the industry rate. Monthly transacting users increased to about 80 million from 74 million a year earlier, which Bernstein read as continued growth in user engagement.
The brokerage named strong payment volumes, tight cost control and robust financial services growth as the quarter's key positives.
"With cost discipline continuing to play out as expected, the earnings trajectory remains firmly intact," Bernstein said.
Indicators of the lending franchise, including expected credit losses and repeat-borrower metrics, remain healthy, the brokerage said.
Bernstein was not alone in its optimism. Jefferies raised its target price to INR 1,600 from INR 1,450 and kept a Buy rating, calling the quarter one of "strong growth momentum" and naming Paytm among its preferred fintech picks.
Emkay was more bullish, lifting its target to INR 1,700 from INR 1,500 while reiterating a Buy, and pointed to a long growth runway ahead as Paytm continues to win customers and deepen its financial services business.
Both brokerages expect the momentum to sustain over the coming years, projecting steady revenue growth and further margin gains through FY29 as operating leverage plays out. The broadly aligned upgrades reflect growing conviction across the street that Paytm's turn to sustained profitability is holding.