Bernstein calls Paytm's financial services distribution biz its 'Star Performer' as revenue grows 45 pc

New Delhi, July 22 (IANS) Global brokerage Bernstein said that fintech pioneer Paytm's financial services distribution business was the standout of its June-quarter performance, with revenue up 45 per cent (year-on-year) to Rs 814 crore, as cross-sell of credit and other financial products continued to improve.

The brokerage maintained its ‘Outperform’ rating, with a price target of Rs 1,500.

Bernstein said Paytm's Q1 FY27 results supported its investment thesis of "non-linear profit growth" driven by revenue growth and operating leverage. Revenue rose 28 per cent year on year while indirect expenses grew just 6 per cent, lifting EBITDA 182 per cent. On a comparable basis, excluding PIDF incentives, EBITDA rose nearly tenfold.

The brokerage also commended the fintech on continued cost discipline, despite showcasing strong growth.

Platform-building costs fell 3 per cent year on year despite continued investment in artificial intelligence and product development, which Bernstein said gave it "greater confidence in the sustainability of this trend."

Payment volumes also stayed strong. Merchant GMV rose 31 per cent to Rs 7.1 trillion, while consumer UPI payment value grew 45 per cent, more than twice the industry rate. Monthly transacting users increased to about 80 million from 74 million a year earlier, which Bernstein read as continued growth in user engagement.

The brokerage named strong payment volumes, tight cost control and robust financial services growth as the quarter's key positives.

"With cost discipline continuing to play out as expected, the earnings trajectory remains firmly intact," Bernstein said.

Indicators of the lending franchise, including expected credit losses and repeat-borrower metrics, remain healthy, the brokerage said.

Bernstein was not alone in its optimism.