Global brokerage Bernstein has identified Paytm's financial services distribution segment as the standout performer of its June-quarter (Q1 FY27) results, with revenue surging 45% year-on-year to ₹814 crore, driven by improved cross-selling of credit and other financial products. The brokerage maintained its 'Outperform' rating on the fintech major with a price target of ₹1,500.

Q1 FY27 Results at a Glance

Bernstein said Paytm's quarterly performance reinforced its investment thesis of 'non-linear profit growth,' underpinned by revenue expansion and operating leverage. Overall revenue climbed 28% year-on-year, while indirect expenses grew a modest 6%, propelling EBITDA by 182%. On a comparable basis — excluding PIDF incentives — EBITDA rose nearly tenfold, underscoring the depth of the operational turnaround.

Cost Discipline and Platform Investment

Despite robust top-line growth, Paytm kept a firm lid on costs. Platform-building expenses fell 3% year-on-year, even as the company continued investing in artificial intelligence and product development. Bernstein said this gave it 'greater confidence in the sustainability of this trend,' signalling that margin gains are not coming at the expense of future growth capacity.

Payment Volumes Remain Robust

The payments business also delivered strong numbers. Merchant GMV rose 31% to ₹7.1 trillion, while consumer UPI payment value grew 45% — more than twice the broader industry rate. Monthly transacting users climbed to approximately 80 million from 74 million a year earlier, which Bernstein interpreted as sustained improvement in user engagement across the platform.

Indicators of the lending franchise, including expected credit losses and repeat-borrower metrics, remained healthy, the brokerage noted. 'With cost discipline continuing to play out as expected, the earnings trajectory remains firmly intact,' Bernstein said.

Street Conviction Builds Across Brokerages

Jefferies raised its target price to ₹1,600 from ₹1,450, retaining a Buy rating, and described the quarter as one of 'strong growth momentum,' naming Paytm among its preferred fintech picks. Emkay went further, lifting its target to ₹1,700 from ₹1,500 while reiterating a Buy, pointing to a long growth runway as Paytm continues to acquire customers and deepen its financial services footprint.

Both brokerages project steady revenue growth and further margin expansion through FY29 as operating leverage plays out. The broadly aligned upgrades reflect growing conviction across the street that Paytm's pivot to sustained profitability is holding firm.