Emkay bumps up Paytm's rating to 'Add' from 'Reduce', doubles target price

One 97 Communications Ltd

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26 Aug, 2025 12:21

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Emkay Global Financial Services has upgraded PayTM to 'Add' from 'Reduce' while raising the target price to Rs 750 from Rs 375, citing easing regulatory challenges and efforts to optimise operating expenses. This new target signals a potential upside of 15 percent from the stock's previous close of Rs 650.

PayTM shares have been giving positive monthly returns since June. PayTM shares have gained 63 percent in the past six months, outperforming the Nifty 50 which gained 18 percent during the same period.

Emkay noted that PayTM's loan distribution business is expected to gain pace, while its broking and insurance distribution segment has already turned profitable.

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In a strategic move, PayTM sold off its operationally heavy entertainment business in Q2, which is expected to boost cash reserves. The company remains open to divesting any non-core assets, as it focuses on profitability. Emkay expects PayTM to turn EBITDA positive by Q4 FY25.

PayTM is a multinational financial technology company, that specialises in digital payments and financial services, based in Noida. PayTM was founded in 2010 by Vijay Shekhar Sharma under One97 Communications.

In Q1 FY25, PayTM's net loss expanded to Rs 840 crore, up from Rs 551 crore in the previous quarter, while revenue dipped 34 percent to Rs 1,502 crore. The EBITDA loss for the June quarter stood at Rs 792 crore, compared to Rs 223 crore in the previous quarter.

Despite these challenges, the company reiterated its commitment to achieving PAT profitability, as highlighted by founder Vijay Shekhar Sharma at PayTM's recent AGM. Following this statement by Sharma, One 97 Communications saw its shares rise two percent in the morning session of September 12.

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