Nomura sets ₹2,250 target for Paytm as stock gains 50% in six months

Global brokerage Nomura has started coverage on Paytm with a Buy rating and a target price of ₹2,250, pointing to a potential 33% upside from the last closing price. This positive outlook follows a strong market run where Paytm shares rallied nearly 50% over the past six months, despite mixed short-term returns that include a 5.4% drop over one month and a 3.5% gain in a week. The stock reached a 52-week high of ₹1,856.50 on September 16, 2026, recovering from a 52-week low of ₹947.10 in March 2026.

Growth Drivers

Nomura's bullish view is built on several factors, including growth in digital payments, higher merchant lending, an improved cost structure, and potential revenue from UPI merchant discount rates. The brokerage expects Paytm's gross merchandise value to grow at a compound annual growth rate of 25% between fiscal year 2025 and 2029. Net payment margins could rise from 4.03 basis points in fiscal year 2026 to 5.26 basis points by fiscal year 2029, driven by credit cards and RuPay on UPI. Merchant lending penetration is projected to climb from 8% of its 15.7 million subscription merchant base to 11% by fiscal year 2029.

Costs and New Revenue

Total indirect costs are projected to drop from about 50% of revenue in fiscal year 2026 to 34.1% by fiscal year 2029. Employee costs could fall from 30.7% to 19.8% of revenue due to artificial intelligence efficiencies, while technology costs may decrease from 7.6% to 5.9%. Potential UPI merchant discount rate revenue could bring in ₹5 billion in fiscal year 2028 and ₹6.2 billion in fiscal year 2029. International expansion through licensing partnerships is expected to contribute to earnings from fiscal year 2030, alongside the launch of Pi, Paytm's proprietary enterprise artificial intelligence product for banks and insurers. Nomura expects earnings before interest, taxes, depreciation, and amortisation to grow at a compound annual growth rate of 96% between fiscal year 2026 and 2029, with the stock trading at roughly 26 times its estimated fiscal year 2029 enterprise value to earnings before interest, taxes, depreciation, and amortisation.

Risks

Despite the positive forecast, the investment case carries risks. Nomura highlights intensifying market competition and potential deterioration in lending asset quality as key concerns for the company.

Context

Brokerage firms frequently initiate coverage on major listed companies to give institutional and retail investors detailed projections based on financial models and market trends. India's broader fintech market continues to expand rapidly, supported by widespread adoption of unified payments interface transactions across the country.