Shares of One 97 Communications, which operates Paytm, surged over 6 per cent in early trade on Thursday after the company reported a turnaround to profit in the March quarter and posted strong revenue growth driven by payments and financial services businesses.

The stock climbed to an intraday high of ₹1,181 on the NSE. At 9.48 am, it was trading at ₹1,174.60, up from the previous close of ₹1,110.60.

The company reported a consolidated profit of ₹183 crore for the quarter ended March 2026, compared with a loss of ₹545 crore in the corresponding period last year.

Consolidated revenue from operations rose 18.4 per cent y-o-y to ₹2,264 crore in Q4 FY26 from ₹1,912 crore a year earlier.

For the full financial year FY26, the company posted a consolidated profit of ₹552 crore against a loss of ₹663 crore in FY25. Annual revenue from operations increased 22.2 per cent to ₹8,437 crore from ₹6,900 crore in the previous fiscal.

Brokerages said the company’s improving profitability, resilient payments business and continued momentum in financial services supported investor sentiment despite the absence of UPI incentive income.

Citi maintained a buy rating with a target price of ₹1,375. The brokerage said Q4 core payment margins excluding subsidies continued to improve, while merchant business momentum remained robust. It noted that profits and EBITDA missed estimates due to higher marketing spends as the company stepped up promotional activity, but added that operating leverage continues to play out with fixed costs remaining under control.

Jefferies also maintained a buy rating with a target price of ₹1,350. The brokerage said revenue momentum helped offset the absence of PIDF and UPI incentives, with growth led by the financial services business. It added that contribution margins are normalising, while operating efficiency helped adjusted EBITDA margins improve to 8 per cent.

On the other hand, Bernstein maintained an outperform rating with a target price of ₹1,500. The brokerage said Paytm’s Q4 FY26 EBITDA was broadly in line with consensus estimates at ₹1.3 billion and highlighted resilient profitability despite the loss of PIDF incentives and the absence of UPI incentive accrual during the quarter. It said financial services revenue grew 12 per cent q-o-q and 38 per cent y-o-y, driven by merchant lending traction.

The brokerage added that UPI volumes surged 46 per cent y-o-y compared with industry growth of around 21 per cent, indicating improving engagement. Device additions remained steady at around 0.7 million during the quarter, easing concerns around competitive intensity. Bernstein also noted that indirect expenses remained tightly controlled, while payments margin declined 9 basis points due to the discontinuation of PIDF incentives. It expects non-linear EBITDA expansion over FY26-30, supported by more than 20 per cent revenue growth and disciplined costs.

Published on May 7, 2026