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Paytm parent One97 Communications rises 11% on UPI MDR hopes
Analysts at Bernstein and JM Financial raised price targets after Parliament cleared an enabling amendment that could apply a merchant discount rate to some UPI transactions above a threshold.
One97 Communications, the parent of Paytm, gained 11% this week to close at 1,603, its biggest weekly jump in four months, extending a broader recovery driven by improved sentiment around potential UPI monetisation, LiveMint Markets reports. The stock’s recent rise comes as expectations build that a merchant discount rate could be introduced for a limited set of UPI merchant transactions above a threshold, while keeping consumer and person-to-person payments free.
The potential change is also tied to updated analyst views. Bernstein raised its Paytm target price to ₹2,200 from ₹1,500 while keeping an Outperform rating, saying an MDR could improve net payment margins by 3-4 basis points and lift FY30 earnings per share by about 30% versus prior forecasts. Bernstein also noted its revised target is above Paytm’s IPO price of ₹2,150 per share.
JM Financial similarly increased its target to ₹1,950 from ₹1,500 and reiterated a Buy rating after an enabling amendment cleared Parliament. The brokerage said the move opens the possibility of applying MDR to UPI transactions above a defined threshold, creating a new earnings stream for Paytm, and estimated incremental revenue of ₹200 crore in FY27 and ₹440 crore in FY28 based on its assumptions about industry-wide MDR and qualifying UPI gross merchandise value.
The latest rally followed earlier improvements in earnings visibility after regulatory headwinds eased. One97’s shares have risen about 70% from their March low and have closed higher in each of the last four months, after it shifted focus to core payments and financial services distribution businesses following Reserve Bank of India restrictions on Paytm Payments Bank in 2024.