- Jefferies has lowered 12-month price targets for Paytm and Pine Labs but kept buy ratings
- Paytm's target cut to Rs 1,350 with 28% upside; Pine Labs to Rs 260 with 58% upside
- Both firms expect 20%+ revenue growth and margin expansion via operating leverage
Multinational brokerage Jefferies has lowered the share price target for Paytm parent One 97 Communications Ltd. and Pine Labs Ltd., while still retaining a 'buy' rating and expecting a notable surge in the stock.
The revised 12-month price target for Paytm is Rs 1,350 from Rs 1,400, with a potential upside of 28% over the previous close.
For Pine Labs, the new target of Rs 260 (Rs 300 earlier) implies an upside of 58%.
Both payments platforms are targeting over 20% revenue growth and expansion in Ebitda margins aided by operating leverage. They are expanding network, growing faster in loan origination and expanding into new areas, analysts said in a note.
Paytm Outlook
Paytm is expected to deliver 22% revenue CAGR over FY26–28, with operating margins expanding from 8.5% to 16%, according to Jefferies.
The company has seen limited impact from recent restrictions on rent, education and RMG payments made via credit cards.
On lending, merchant loans are growing faster and deliver higher take rates, while retail lending remains largely vanilla personal loans driven by distribution. A key upside could emerge from credit on UPI once NBFCs are allowed to lend, potentially boosting volumes and payment monetisation. Wealth and travel platforms are being built, with meaningful contributions expected from FY28–29.
Pine Labs Outlook
Pine Labs is expanding its DCP network, seeing healthy growth in card‑based EMI volumes and tapping tactical opportunities in gift card distribution. In the mid‑market segment, the company is scaling up through master franchises, offering integrated platforms covering payments, data analytics and controls.
The company is also working to reduce working capital intensity by shifting towards subscription‑based fee settlements and improving reconciliation and securitisation in its ICB business. These initiatives are expected to support a 23% revenue CAGR over FY26–28, with adjusted margins improving from 20% to 27%, nearly doubling Ebitda over the period.
While FY26 profit estimates have been lowered due to adjustments in other income, FY27–28 forecasts remain largely unchanged, Jefferies said.
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