Paytm shares surged over 5% following the National Payments Corporation of India (NPCI) approval to onboard new users for its Unified Payments Interface (UPI) service. This regulatory clearance is a significant milestone for Paytm, as it removes a major barrier to growth and enhances investor confidence.
Key Developments
- Regulatory Approval: The NPCI’s green light allows Paytm Payments Services Ltd. (PPSL) to resume onboarding new UPI users, a move expected to expand its market share significantly. This approval was confirmed in a statement from Paytm, which emphasized its commitment to compliance and regulatory standards.
- Market Reaction: Following the news, Paytm’s stock reached a high of ₹565 on the Bombay Stock Exchange, closing at ₹545.50. Analysts view this development positively, with brokerage firms adjusting their target prices upward. Citi Research upgraded Paytm to a “buy” rating, raising its target price from ₹440 to ₹900.
- Future Prospects: With plans to reapply for a payment aggregator license, analysts anticipate that Paytm could see increased Monthly Transacting Users (MTUs) in the upcoming quarters. Ventura Securities forecasts substantial revenue growth for Paytm over the next two years, projecting its stock could potentially double or even triple under favorable conditions.
This combination of regulatory approval and positive market sentiment positions Paytm favorably for future growth in the competitive digital payments landscape.
Paytm Q2 Earnings: Revenue
In Q2 FY 2025, Paytm reported an operating revenue of ₹1,660 crore, reflecting an 11% increase quarter-over-quarter. This growth was driven by a 5% rise in Gross Merchandise Value (GMV) and a notable 34% increase in revenues from financial services. However, revenue declined by 34.1% year-over-year due to the sale of its ticketing business.
Paytm Quarter Results: EBITDA
In its latest quarter results, Paytm reported an EBITDA of ₹(404) crore, showing an improvement of ₹388 crore quarter-over-quarter. The EBITDA before ESOPs was ₹(186) crore, up from ₹(153) crore year-over-year. The company achieved a profit of ₹930 crore, largely due to a one-time gain from selling its ticketing business.
