Motilal Oswal Sets Price Target of Rs 1300 for One 97 Communications

One 97 Communications Reports Strong Revenue Growth in 4QFY26

One 97 Communications, also known as Paytm, has reported better-than-expected revenue growth in the fourth quarter of fiscal year 2026. According to the company's financial results, revenue increased by 18% year-over-year (YoY) and 3% quarter-over-quarter (QoQ) to INR 22.64 billion, surpassing market expectations by 4%.

The growth in revenue can be attributed to a combination of factors, including healthy Gross Merchandise Value (GMV), market share gains in both consumer and merchant payments, and growth in the distribution of financial services. The company's financial services revenue, in particular, saw a significant increase of 38% YoY and 12% QoQ, driven by strong partnerships in merchant lending.

Key Financial Highlights

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The company's adjusted Profit After Tax (PAT) for the fourth quarter of fiscal year 2026 was INR 1.6 billion, which is largely in line with market expectations.

Outlook and Recommendation

For the upcoming fiscal year 2027, the research team at Motilal Oswal projects a PAT of INR 8.3 billion, while for fiscal year 2028, they expect a PAT of INR 17.9 billion. Based on these projections, the team values Paytm at INR 1,300, which is equivalent to 22 times the estimated EBITDA for fiscal year 2030, discounted to September 2027. This valuation translates to 7.6 times September 2027 sales. The team has retained a Neutral rating on the stock.

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