Domestic Mutual Funds Continue To Bet On Paytm; Raise Stake By 1% During The Quarter, Taking The Total To 8%

Recently, analysts at Dolat Capital have reiterated BUY rating for Paytm, with increased target price of Rs 920, from Rs 630 earlier.

Domestic Institutions led by mutual funds have raised their stake in Indian mobile payments pioneer Paytm. Latest shareholding pattern filed by the company shows a 1% increase in stake by mutual funds as the trust grows on the brand and its ability to bounce back. Paytm remains focussed on its core payments and financial services business. 

On a positive note, leading domestic mutual funds Mirae Asset and Nippon Mutual Fund expanded their stake in the company.

Recently, analysts at Dolat Capital have reiterated BUY rating for Paytm, with increased target price of Rs920, from Rs630 earlier. The firm mentioned in its report, “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.”

Meanwhile, Emkay Global called Paytm’s recovery as ‘rise of a phoenix’, predicting strong growth and profitability. The brokerage noted that the fintech company is on track to achieve annual revenues of approximately  ₹100bn by FY28, resulting in a surplus of ₹25-30bn over its operating costs.

Another brokerage Ventura recently initiated coverage on Paytm with a target price of ₹1,170. Analysts at the firm said that despite RBI stricture on associate Paytm Payment Bank (PPBL), they believe that Paytm’s business model is robust and technology is gold standard.

“With UPI emerging as the favoured digital payments medium and Paytm originated soundbox (+POS) becoming an essential toolkit for payments, Paytm is well placed to benefit from the tailwind associated with this. With a clear focus on enhancing its core payment services and expanding into financial services, Paytm is well-positioned to capitalize on the growing digital economy,” said the report.  

In Q1 FY25, Paytm reported operating revenue of ₹1,502 crore, and a strong balance sheet with ₹8,108 Cr of cash on books. The company had then said, “Going forward, we expect revenue and profitability to improve, driven by growth in operating parameters such as GMV, an expanding merchant base, recovery in loan distribution business and continued focus on cost optimization.”