Goldman Sachs Reinforces Optimism on Paytm Despite Banking License Hurdle

Goldman Sachs has reaffirmed its bullish stance on Paytm, part of One 97 Communications Ltd., by sustaining a 'Buy' rating and setting the target price at ₹1,400, suggesting a potential 22% uptick from the current stock value. The firm attributed its confidence to Paytm's growing footprint in both consumer and merchant sectors, combined with minimal impact from a revoked banking license of an associate entity.

Pointing to Paytm's robust operational metrics, Goldman Sachs projected a strong fourth quarter for FY 2026, anticipating a 26% year-on-year increase in gross merchandise value. This marks an improvement from the 23% growth recorded in the third quarter, despite facing headwinds from reduced PIDF incentives. The firm expects the company's EBITDA performance to remain resilient, forecasting a margin of 5.8%.

The report further highlighted Paytm's rise in UPI market share to 6.5% in March 2026, illustrating a steady rebound. Correspondingly, the merchant app download market share has also shown promising recovery signs, reaching back to 2023 levels. Notably, the financial services sector is leading Paytm's performance, with a 33% year-over-year revenue boost, signaling renewed lending momentum.

On the regulatory front, the cancellation of the associate banking license poses limited ramifications for Paytm. The company distanced itself from PPBL, migrating its UPI handles to partner banks post-2024, and reportedly maintains regulatory adherence. Recent authorizations for payment aggregation further validate Paytm's stable operations, reinforcing investor confidence in its core business trajectory.

(With inputs from agencies.)