Is Paytm Stock Entering a New Growth Phase? Here’s what Goldman Sachs has to say

Synopsis: One 97 Communications Limited received a “Buy” rating from Goldman Sachs, which expects strong revenue growth, improving profitability, and higher earnings driven by lending, postpaid, and marketing services businesses.

This Mid-cap Stock, engaged in providing digital payment services, financial solutions, merchant services, and technology-driven products through its Paytm platform, is in focus after Goldman Sachs gave a buy target of Rs. 1,400, which has an upside potential of 21.35 percent.

With a market capitalization of Rs. 74,356.93 crore, the shares of One 97 Communications Limited were currently trading at Rs. 1,161.50 per equity share, rising nearly 0.68 percent from its previous day’s close price of Rs. 1,153.65.

What is the News?

Goldman Sachs, a prominent brokerage firm, has recommended a “Buy” call on One 97 Communications Limited with a target price of Rs. 1,400 per share, indicating an upside potential of 21.35 percent from its previous day’s close price of Rs. 1,153.65 per share. 

Goldman Sachs remains positive on Paytm as the company continues to show improving revenue growth across its businesses. The brokerage believes Paytm’s operating leverage is strengthening, which means profits could grow faster as revenues increase. Goldman Sachs expects EBITDA margins to improve gradually and reach 15-20 percent over the next two to three years, supported by better cost control and higher scale.

The brokerage also highlighted that merchant lending and consumer postpaid services remain important growth drivers for the company. In addition, Paytm’s marketing services business is expected to return to growth, which could further support overall revenues. With improving profitability, strong growth momentum, and expanding financial services offerings, Goldman Sachs believes Paytm is well placed for long-term earnings growth.

Margin Expansion:

One 97 Communications Limited expects stronger growth and margin expansion in FY27, supported by multiple business drivers. The company plans to increase merchant payments and improve payment processing margins through higher market share gains. Growth in the high-margin merchant loan distribution business is also expected to support profitability, driven by rising lender participation and an expanding merchant base.

The company is also focusing on consumer lifecycle monetisation and wider use of AI across its operations. Paytm believes AI-led product innovation and operating efficiency will help improve EBITDA margins over the coming years. With better cost discipline, growing financial services adoption, and increasing scale, the company aims to strengthen profitability while maintaining steady revenue growth.

Revenue Mix of FY26 & Q4 FY26:

One 97 Communications Limited generated most of its Q4 FY26 revenue from its Payment Services business, which contributed Rs. 1,265 crore, showing a 21 percent YoY growth. Distribution of Financial Services was the second-largest segment with revenue of Rs. 750 crore, growing 38 percent YoY. Marketing Services contributed Rs. 239 crore, while Other Operating Revenue stood at Rs. 10 crore. Overall, the company reported total revenue from operations of Rs. 2,264 crore during the quarter.

For FY26, Payment Services remained the company’s largest revenue contributor with Rs. 4,646 crore in revenue. Distribution of Financial Services contributed Rs. 2,594 crore, supported by strong growth in lending and financial products. Marketing Services added Rs. 952 crore, while Other Operating Revenue contributed Rs. 245 crore. Total revenue from operations for FY26 stood at Rs. 8,437 crore, reflecting Paytm’s continued growth across payments and financial services businesses.

Company Overview:

One 97 Communications Limited was founded in 2000 and is an Indian digital payments and financial services company headquartered in Noida, Uttar Pradesh. It is best known as the parent company of Paytm, one of India’s leading mobile payment and fintech platforms. The firm played a pivotal role in popularizing mobile wallets and digital transactions across India’s consumer and merchant ecosystems.

Recent Quarter Results:

Coming into financial highlights, One 97 Communications Limited’s revenue has increased from Rs. 1,912 crore in Q4 FY25 to Rs. 2,264 crore in Q4 FY26, which has grown by 18.41 percent. The net profit has shifted from negative to positive, from a net loss of Rs. 545 crore in Q4 FY25 to a net profit of  Rs. 183 crore in Q4 FY26.

One 97 Communications Limited’s revenue has grown at a CAGR of 24.67 percent over the last five years. In terms of return ratios, the company’s ROCE and ROE stand at 5.01 percent and 4.70 percent, respectively. One 97 Communications Limited has an earnings per share (EPS) of Rs. 8.64, and its debt-to-equity ratio is 0.01x.

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