Goldman Sachs Maintains Optimism on Paytm, Projects 22% Potential Upside

Goldman Sachs Reiterates "Buy" Rating on Paytm with ₹1,400 Target Price

Global brokerage Goldman Sachs has reaffirmed its "Buy" rating on Paytm (One 97 Communications Ltd.) with a target price of ₹1,400, indicating an upside of around 22% from current levels. The brokerage cites continued market share gains across consumers and merchants, and limited fallout from the cancellation of its associate entity's banking license.

Paytm is expected to deliver another quarter of strong operational performance in Q4 FY 2026, with gross merchandise value (GMV) or total transaction value projected to grow nearly 26% year-on-year, up from 23% in Q3. Despite a near-term revenue headwind from the absence of PIDF incentives, Goldman Sachs sees underlying EBITDA performance holding up well, with margin at 5.8%.

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Goldman Sachs also highlighted that Paytm continues to gain ground across both consumer and merchant segments. According to data from National Payments Corporation of India, Paytm's UPI market share by value rose to 6.5% in March 2026, up from 6.2% in December 2025 and 5.4% a year ago, marking a steady, sustained recovery.

On the merchant side, citing SensorTower data, it said the company's merchant app download market share has been steadily improving, with Q4FY26 market share back to 2023 levels, signalling a full recovery in merchant engagement.

Financial services is expected to remain Paytm's strongest vertical, with revenue growth at 33% YoY in Q4, broadly matching the 34% YoY pace in Q3. Encouragingly, Paytm's Default Loss Guarantee (DLG) disclosures show the outstanding loan book accelerating sharply to 11% QoQ growth in Q4, up from just 2% QoQ in Q3, a sign that lending momentum is returning.

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On profitability, Goldman Sachs expects Paytm to remain EBITDA positive, with underlying margins continuing to improve. The report also points to a strong medium-term trajectory, with EBITDA margins expected to expand meaningfully as the business scales.

The brokerage said the regulatory action carries limited implications for Paytm, noting that the company has effectively decoupled from PPBL over the past two years. Paytm had already impaired its entire investment in PPBL in early 2024, currently derives no revenue from the bank's operations, and migrated its UPI handles to partner banks after securing a Third Party Application Provider (TPAP) license from NPCI in March 2024. Goldman Sachs added that Paytm and PPBL have had no common management or board members for the past two years, and the language of the regulator's order is consistent with the Banking Regulation Act, pointing to a procedural closure rather than fresh regulatory escalation.

Importantly, the brokerage highlighted that the regulator itself granted Paytm payment aggregator authorisation for both online and offline merchants as recently as November and December 2025, a strong signal of continued regulatory comfort with Paytm's core business.