Paytm’s merchant expansion is helping ease concerns over intensifying competition in India’s digital payments market, according to global brokerage Bernstein. The brokerage has maintained its ‘Outperform’ rating on Paytm, with a target price of ₹2,200, following the fintech company’s Q2 FY27 results.
Paytm Adds 7 Lakh Merchant Devices in Q2 FY27
In its latest report on Paytm’s Q2 FY27 results, Bernstein highlighted the addition of approximately 7 lakh merchant devices during the September quarter, consistent with the company’s recent quarterly run rate. The brokerage noted that sustained device additions were alleviating concerns around rising competitive intensity.
Paytm’s merchant device network expanded to 1.64 crore, reflecting its growing reach among businesses. The company also reported improving consumer engagement, with monthly transacting users increasing by 50 lakh sequentially and 1 crore year-on-year to reach 8.5 crore.
Bernstein highlighted the sharp increase in consumer activity as another positive development, suggesting that Paytm continues to strengthen engagement across its payments ecosystem.
Paytm Q2 FY27 Results Show Revenue and EBITDA Growth
While the brokerage flagged rising operating expenses, Paytm’s financial performance reflected improving operating leverage. Revenue increased 28 per cent year-on-year to Rs 2,648 crore, while EBITDA rose 90 per cent to Rs 270 crore. Indirect expenses, despite increasing in absolute terms, declined as a proportion of revenue to approximately 46 per cent from 52 per cent a year earlier.
Payment Monetisation Improves Despite Flat GMV
Bernstein also noted an improvement in Paytm’s payments monetisation, with net payment margins expanding from 8.5 basis points to 9.1 basis points. Net payment revenue increased 7 per cent sequentially despite payment GMV remaining flat quarter-on-quarter, indicating improved monetisation of existing transaction volumes.
Financial Services and Marketing Services Drive Growth
Financial services emerged as another growth driver, with revenue rising 49 per cent year-on-year and 12 per cent sequentially. Meanwhile, marketing services revenue grew 26 per cent year-on-year and 20 per cent quarter-on-quarter, marking a recovery after several quarters of stagnation.
Bernstein’s ₹2,200 Paytm Target Implies 33% Upside
With steady merchant expansion, growing consumer engagement and improving payments monetisation, Bernstein’s assessment underscores Paytm’s resilience in an increasingly competitive fintech landscape. The brokerage’s Rs 2,200 price target implies approximately 33 per cent upside from the October 26 closing price.
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