Paytm EBITDA to double in both FY27 and FY28, even without MDR boost: Goldman Sachs

Mumbai (Maharashtra) [India], October 8 (ANI):  Goldman Sachs expects Paytm's EBITDA to more than double in FY27 from FY26 and double again in FY28, even without the benefit of the UPI merchant discount rate (MDR), on back of steady UPI market share gains, shift towards higher-margin payment products, and sustained cost control.
The brokerage reiterated its 'Buy' rating on One 97 Communications, Paytm's parent, and raised its 12-month target price to Rs 2,070 from Rs 1,500. It also raised its FY27-30 revenue estimates to 26% from 8% previously and EBITDA estimates to 40%.
After factoring in MDR, Goldman expects Paytm's FY28 EBITDA to be 5-6 times its FY26 level of Rs 500 crore, followed by around 30% annual growth until FY30. Its revised estimates put EBITDA at Rs 1,234 crore in FY27 and Rs 2,712 crore in FY28. It estimates MDR could add Rs 760-1,270 crore to Paytm's FY28 EBITDA.
Goldman said market share gains span both consumer and merchant payments, with the latter helped by the resumption of online merchant onboarding. Paytm's UPI market share by value rose to 6.9% in July-August 2026 from 6.7% in the June quarter and 5.5% a year earlier, it said, citing NPCI and RBI data.
For the July-September quarter (Q2 FY27), Goldman expects Paytm's revenue to grow 28% year-on-year to Rs 2,640 crore, with gross merchandise value (GMV) up 30%. EBITDA is estimated at Rs 250 crore, up 75% year-on-year and 21% sequentially from Rs 200 crore in the June quarter, with margin rising about 100 basis points sequentially to 9.3%. It forecasts FY27 EBITDA margin at 10.7%, up about 500 basis points from FY26.
Financial services distribution is expected to remain the fastest-growing segment, with revenue up 45% year-on-year, aided by Postpaid, merchant lending and better monetisation in wealth. 
Payments revenue is expected to grow 23%, while marketing services is forecast to grow 6%, recovering from a 3% decline in the previous quarter. 
The brokerage forecasts a 39% revenue CAGR for Paytm over FY26-FY28, with EBITDA growing more than five times over the same period. It said Paytm operates in markets it expects to grow at 15-20% CAGR over the next five years.
Goldman also sees further upside from the scaling of Postpaid, a potential wallet relaunch, and the December 2026 deadline for implementing a UPI market-share cap, which it said could be a material event for Paytm. (ANI)