"For Jun-Qtr, Paytm's revenue growth of 28%, Ebitda margin of 8% were strong and ahead of expectations," Jefferies said, adding that "Paytm is among our preferred Fintechs." The brokerage expects the company's revenue to grow at a 25% CAGR over FY26-29, supported by continued market share gains in payments, deeper monetisation and expansion of lending and financial services businesses.
Jefferies said Paytm's operational performance reflected healthy growth across key metrics. Gross merchandise value (GMV) rose 31% year-on-year, while wider payment margins and growth in financial services revenues helped drive 28% year-on-year revenue growth. Contribution margins remained stable at 55%, while operating leverage lifted EBITDA margins to 8% from 4% a year earlier, despite only a modest increase in fixed costs.
"Growth in contribution and operating synergies lifted Ebitda margin from 4% last year to 8%," the brokerage noted.
Looking ahead, Jefferies expects growth to be driven by payments market share gains, higher adoption of credit-backed payment products, expansion in merchant and personal lending, and scaling up of financial services such as broking, margin trading facility (MTF), insurance and gold investments.
It also expects AI -led efficiencies to improve profitability. "Operating synergies are not just coming from scale, but also leveraging internal AI platforms, and we expect these to lift Ebitda from Rs5bn in FY26 to Rs21bn by FY28," the report said.
Reflecting the stronger outlook, Jefferies raised its earnings estimates and said it expects EBITDA margins to expand from 6% in FY26 to 18% by FY29, while noting that any introduction of MDR on high-ticket UPI transactions could provide additional upside to its forecasts.
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