Paytm rallies 7% on fresh uptrend; Dolat Capital pegs ‘buy’, eyes 37% upside at TP ₹920

Paytm's parent company, One 97 Communications Ltd, shares surged on Tuesday, October 1, after Dolat Capital, a research analyst firm, issued a report on Monday maintaining its “buy” rating and increasing the target price to ₹920, nearly 26 per cent higher than the current market price as of Tuesday's market close. 

According to the research report, Dolat Capital eyed a 37 per cent upside in Paytm's parent stock from the current market price when the report was released. The current market price mentioned in the report was ₹672.

One 97 Communications Ltd shares closed 6.23 per cent higher at ₹731.25 after Tuesday's market session, compared to ₹688.35 at Monday's market close.

“Paytm remains in a bright spot of continued rapid growth in digital payments in India. We believe that the company has potential for growing its revenues multi-fold over next decade and is expected to deliver steadily growing profits FY26E onwards. We believe that DCF (discounted cash flow) valuation is an ideal tool to value the real long-term potential of this business,” the report said.

Dolat Capital also stated that the company's business is “resilient” and “well poised” to deliver robust growth, which led to the analyst firm realigning its estimates considering the improved business prospects and divesture of its events business for ₹2,000 crore ( ₹20 billion), according to the report. 

The analyst firm also noted that in the last three months, Paytm's business has experienced fewer challenges and improved prospects across the segments. These include Paytm handle migration, clearance of regulatory hurdles with FDI approval for the Payment Aggregator (PA) license, stable market share as indicated by UPI consumer data, and a growing partner network in financial distribution, as per the report.

One 97 Communications Ltd on recovery path

The analyst firm also stated that the brand is set on the recovery path from its PPBL (Paytm Payments Bank Limited) and Postpaid impact. “The company continues to possess large (serving both on need and want), huge customer base (MTUs of 78mn+, ATU of ~150mn+) and robust tech platform number of use cases,” the firm said in the report.

“We maintain our ‘BUY’ rating on the stock with revised TP of Rs. 920 (implies 4.6x/3.6x on FY26/FY27E EV/Sales),” Dolat Capital report said.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.