Paytm EBITDA Set to Double in FY27 and FY28, Says Goldman Sachs
Goldman Sachs raises Paytm target price to Rs 2,070, forecasting EBITDA to double in FY27 and FY28 driven by UPI gains and cost controls.
In a major bullish outlook for the fintech giant, Goldman Sachs has projected that Paytm's EBITDA is set to more than double in FY27 compared to FY26, and will double once again in FY28. Remarkably, this explosive growth is expected even without the inclusion of any benefits from the UPI merchant discount rate (MDR).
The global brokerage has reiterated its 'Buy' rating for One 97 Communications, the parent company of Paytm. Alongside this rating, Goldman Sachs has significantly hiked its 12-month target price for the stock to Rs 2,070, up from the previous target of Rs 1,500.
Drivers of Explosive Profitability
The surge in profitability is expected to be fueled by several key strategic pillars. According to the brokerage, the primary drivers include:
- Steady UPI Market Share Gains: Paytm continues to capture a larger slice of the digital payments pie.
- High-Margin Product Shift: A strategic move toward payment products that offer better margins.
- Sustained Cost Control: Disciplined spending helping to bolster the bottom line.
- Merchant Onboarding: The resumption of online merchant onboarding is providing a boost to the merchant payments segment.
Data from NPCI and RBI supports this momentum, showing that Paytm's UPI market share by value rose to 6.9% in the July-August 2026 period, up from 6.7% in the previous quarter and 5.5% a year prior.
Revised Financial Estimates
Goldman Sachs has significantly revised its financial projections for the company. The brokerage has increased its FY27-30 revenue estimates from 8% to 26% and raised its EBITDA estimates by 40%. The specific EBITDA projections are as follows:
- FY27 EBITDA: Estimated at Rs 1,234 crore.
- FY28 EBITDA: Estimated at Rs 2,712 crore.
If the MDR is factored into the equation, Goldman expects Paytm's FY28 EBITDA could reach levels 5-6 times higher than its FY26 level of Rs 500 crore. The potential addition from MDR could range between Rs 760 crore and Rs 1,270 crore for FY28.
Segment Performance and Future Upside
The brokerage anticipates that financial services distribution will remain the fastest-growing segment, with revenue expected to climb 45% year-on-year. This growth is being supported by Postpaid services, merchant lending, and improved monetisation within the wealth management sector.
Other key forecasts include:
- Payments Revenue: Expected to grow by 23%.
- Marketing Services: Forecasted to grow by 6%, marking a recovery from a previous 3% decline.
- Q2 FY27 Revenue: Goldman expects revenue to grow 28% year-on-year to Rs 2,640 crore, with Gross Merchandise Value (GMV) rising by 30%.
Looking ahead, Goldman Sachs identifies several catalysts that could provide further upside for the company. These include the scaling of Postpaid services, a potential relaunch of the Paytm wallet, and the upcoming December 2026 deadline for implementing a UPI market-share cap, which is viewed as a potentially material event for the company.