Shares of Paytm parent, One97 Communications Ltd, slipped 4 per cent on Friday even after the company swung to profit in the December quarter, as investors weighed largely in-line results and near-term concerns around incentives from the RBI’s Payments Infrastructure Development Fund (PIDF) scheme.
The stock declined as much as 4 per cent and was trading about 3 per cent lower at ₹1,132.50 around 12.10 pm, after touching an intraday low of ₹1,115.60 against the previous close of ₹1,168.10.
In Q3 FY26, the fintech firm reported a consolidated profit of ₹225 crore, reversing a net loss of ₹208 crore in the year-ago period. Consolidated revenue from operations rose 20 per cent y-o-y to ₹2,914 crore during the quarter under review from ₹1,828 crore in the year-ago period, driven by growth in financial services and steady expansion in its payments franchise.
Brokerages were broadly constructive on the quarter, though some trimmed earnings estimates and target prices to factor in the end of PIDF incentives and seasonal margin pressures.
Domestic brokerage Motilal Oswal said Paytm delivered a healthy quarter broadly in line with expectations, supported by robust revenue growth and disciplined execution, which drove strong profit expansion. The brokerage highlighted healthy GMV growth and a contribution margin of 57 per cent, and expects momentum in the financial services segment to remain strong, aided by improving tailwinds in unsecured lending. It added that developments around the PIDF scheme remain a key near-term monitorable for earnings.
Global brokerage Bernstein described the quarter as strong and reassuring, maintaining its outperform rating with an unchanged target price of ₹1,600. It said margin pressure was largely seasonal due to higher cashback spending and expects payment processing margins to normalise above 4 basis points.
Jefferies maintained buy at a target price of ₹1,450, noting that Paytm’s December-quarter profit was marginally ahead of expectations despite a one-time labour code cost. It said revenue growth was led by loan origination in financial services, while contribution profit rose 30 per cent and margins stood at 57 per cent. Lower indirect costs supported EBITDA, though the brokerage added that clarity on how the company plans to offset lower PIDF incentives will be key going forward.
Citi reiterated buy call, but reduced its target price to ₹1,375. The brokerage lowered longer-term estimates to reflect the absence of PIDF incentives, which had provided a meaningful boost to profitability, but added that monetisation of payments should continue to improve structurally and that the higher-margin financial services business retains strong growth momentum in merchant lending and equity broking.
On the other hand, CLSA retained an underperform rating at ₹1,000, and flagged a sharp quarter-on-quarter rise in employee operating costs and cut its profit-before-tax estimates after factoring in the cessation of PIDF income.
Morgan Stanley kept an equal-weight rating with a target of ₹1,175, pointing to moderation in revenue growth and sequential contribution margins, even as EBITDA benefited from cost control.
Published on January 30, 2026