Paytm Share Price Rockets 3.4% After Goldman Sachs Upgrade: Investor Optimism Hits New High

On Friday, November 28, 2023, the parent company of Paytm, One 97 Communications, managed to attract investors’ attention as its stock rose 3.4% to ₹1,325, even reaching a peak of ₹1,336. The reason?

A huge approval from the international investment bank Goldman Sachs that changed its rating on Paytm from ‘Neutral’ to ‘Buy.’ This has made investors very happy, as they consider this an indication that Paytm’s revival is genuine. In fact, the price of the stock has fluctuated like a roller-coaster over the last year, and now it is time for investors and analysts to watch this fintech favorite closely with a positive perspective and new optimism.

Goldman Sachs Turns Bullish On Paytm

Goldman Sachs has gone very bullish on Paytm to an extent that it has upgraded its rating from Neutral to Buy. The global investment bank has also dramatically raised the 12-month target price, from ₹705 to ₹1,570 per share, which is a 123% increment. In the most optimistic, or blue-sky, scenario, Goldman Sachs predicts that Paytm’s stock could fly to ₹2,320, which would be a potential upside of 79% from the latest closing price.

The brokerage has named improving regulatory conditions, a recovering payments market share, and strong earnings prospects as the main factors of its positive outlook, thus conveying renewed investor confidence in the fintech giant’s long-term growth potential.

Regulatory Hurdles Largely Behind Paytm 

The brokerage noted Paytm has faced three major regulatory hurdles in recent years:

• Online merchant onboarding ban (2022)

• RBI curbs on unsecured lending (2023)

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• Paytm Payments Bank (PPBL) ban (2024)

Goldman believes these challenges are now mostly resolved, supporting recovery in market share and earnings visibility.

The payments market share of Paytm, which also includes UPI transactions, has experienced a remarkable recovery during the last few quarters, indicating a positive change for the fintech giant. Being an online payment aggregator now, the company will most likely step up its customer acquisition campaign; this could, in turn, strengthen its position in the already competitive Indian digital payments sector. According to Goldman Sachs, Paytm’s revenue growth is expected to be around 20–25% annually over the next two to three years.

As a result, the EBITDA estimates for FY26–30 have been increased by 45%, leading to a considerable upgrade in EPS. This optimism is based on factors such as better control over direct and indirect costs, a drastic reduction in ESOP expenses due to the founder foregoing grants, and significant growth in high-margin areas like devices and merchant lending. Altogether, these factors indicate that Paytm has the potential for a sustainable growth cycle, renewing investor confidence in the company’s long-term future.