Daijiworld Media Network – Mumbai

Mumbai, Aug 26: Global brokerage Bernstein has raised its target price for Paytm’s parent company One97 Communications Ltd to Rs 1,200 from Rs 1,100, while maintaining an “Outperform” rating and describing the stock as a long-term buy.

The revision comes in the wake of regulatory relief for Paytm and its steady profitability, which Bernstein says could unlock strong upside in the coming years. “While we see limited scope for meaningful earnings or revenue beats versus consensus in the near term, we remain constructive given several catalysts that can drive long-term upside,” the firm said in its note.

A key driver could be the reintroduction of Paytm’s Buy Now Pay Later (BNPL) product. Bernstein estimates that scaling BNPL back to 75% of its 2023 peak volumes could boost FY27 EPS by 26%. Another major catalyst would be the possible resumption of Paytm Payments Bank operations, which the brokerage said could ease regulatory overhangs and pave the way for favourable approvals.

Further, Bernstein highlighted that securing an NBFC licence could nearly double Paytm’s financial services contribution, potentially driving up to 70% upside to its FY30 EPS estimate. The potential relaunch of Paytm’s wallet service, though expected to have a limited earnings impact, could also reduce regulatory concerns if introduced under a new PPI licence.

“We remain constructive given multiple catalysts that can drive up the probability of a big upside to the long-term EPS potential, alongside Paytm’s positioning as a strong proxy for investors seeking exposure to a revival in consumer credit,” Bernstein concluded.