In an exchange filing released after market hours on Friday, Paytm announced that the RBI had effectively cancelled Paytm Payments Bank’s banking licence. Paytm clarified that it has no exposure to the associate entity and provides no services in partnership with it, adding that Paytm Payments Bank operates independently. “There is no direct financial impact on the company since, as previously disclosed, the company had already impaired its investment in PPBL as of March 31, 2024,” it added.
The shares of the company tanked more than 8% to hit an intraday low of Rs 1,051 apiece on the NSE, before sharply recovering more than 7% to trade at Rs 1,129 apiece, as of around 12:40 pm. The stock was still down around 1.5%.
Jefferies on Paytm share price
Jefferies, in a note, maintained a ‘Buy’ rating on Paytm, with a base case target price of Rs 1,350 apiece, implying an upside potential of nearly 18% from the stock’s previous closing price.
The brokerage noted that the cancellation of Paytm Payments Bank’s banking licence has a low impact on Paytm. Over the long term, Jefferies expects the company to deliver a 22% revenue CAGR over FY26–28, led by healthy growth in financial services (+28%) and payments (+22%).
It estimates the fintech platform’s contribution margins to remain in the 55–56% range. As operating leverage flows through, Jefferies expects the adjusted EBITDA margin to improve to 16% by FY28. In its upside scenario, Jefferies sees Paytm shares rallying 35% to Rs 1,550 apiece, while in its downside scenario, it sees the stock falling 15% to Rs 980 apiece.
Goldman Sachs on Paytm share price
Goldman Sachs maintained its ‘Buy’ rating on Paytm but reduced its target price to Rs 1,400 apiece from Rs 1,470. The revised target implies an upside potential of nearly 31% from the stock’s previous closing price.The brokerage said it views the RBI’s cancellation of the associate entity’s banking licence as an incremental negative, although there is no direct financial impact on Paytm. The key risk is the potential impact on customer or merchant sentiment, it said.
While this may act as a near-term overhang, Goldman Sachs added that the core business momentum remains intact. “Paytm and PPBL have had no common management/board members for the last two years, and we note that the language of the RBI’s recent order on PPBL is consistent with that in the Banking Regulation Act,” it said.
Bernstein on Paytm share price
RBI’s decision to cancel the banking licence of Paytm Payments Bank is likely incrementally negative for its parent, Bernstein said in its note. The brokerage described the regulator’s language as “harsh” and “concerning.” That said, the Societe Generale Group-backed brokerage has retained an ‘Outperform’ rating on Paytm, with a target price of Rs 1,500, implying an upside of around 31% from the previous closing price.
“While Paytm has no role in the current management/board of PPBL (despite the 49% ownership), the harsh language in the RBI’s letter is concerning,” Bernstein said, noting the history of regulatory actions. “Post the RBI restrictions on PPBL in early 2024, the company took steps to terminate interlinkages between PPBL and the core business, reconstitute the board, and potentially revive operations of the bank,” the note said.
The brokerage sees no impact on current business or numbers, as PPBL’s operations have been suspended for more than a year, and the company has created a clear separation between the payments bank and the parent, especially after the regulatory action in early 2024. Paytm is unlikely to see any one-off impact on earnings as well.
For the super-optimistic investor, Bernstein believes this development could clear the way for the company to apply for an NBFC or PPI licence, enabling Paytm to offer certain payment (like a wallet) and credit products.
Technical view on Paytm share price
Paytm opened with a sharp gap-down, slipping below its key short- and long-term moving averages. However, the stock witnessed immediate buying interest at lower levels, helping it recover a portion of its early losses, said Sudeep Shah, Head-Technical and Derivatives Research at SBI Securities.
He added that the rebound was backed by a notable surge in volumes, indicating active participation from buyers near support zones.
“Despite the intraday recovery, technical indicators have weakened slightly. The RSI has slipped below 60 and is trending downward, while the DI- has crossed above DI+ on the ADX, suggesting sellers currently hold an edge. That said, since these indicators are lagging, the stock’s price action and follow-through will be critical in the coming sessions,” he said.
On the upside, Rs 1,125-1,130 is likely to act as an immediate resistance zone, and a sustained move above this range could trigger a further pullback. On the downside, he sees Paytm shares finding support at Rs 1,055-1,050, below which weakness may intensify.
From a technical perspective, Paytm is attempting to stabilise around the Rs 1,050–1,060 zone, which has emerged as a crucial near-term support following the sharp sell-off, said Harshal Dasani, Business Head, INVasset PMS. The intraday recovery from lower levels suggests that panic selling has been partially absorbed, but the structure remains fragile.
“Momentum indicators have improved from oversold territory, with RSI moving back above 50, indicating a short-term pullback, though not yet a confirmed trend reversal. On the upside, the stock faces immediate resistance in the Rs 1,140-1,150 range, with a stronger supply zone near Rs 1,180-1,200, where the earlier breakdown occurred. As long as the stock holds above Rs 1,050, there is room for a technical rebound, but the move is likely to remain volatile and headline-driven. A decisive break below this support could reopen downside towards Rs 1,000 levels, while only a sustained move above Rs 1,150 would meaningfully improve the near-term technical outlook,” Dasani said.
Investors should consider a buy call only above Rs 1,143, where the stock can decisively reclaim its key EMAs and confirm a trend reversal, said Virat Jagad, Senior Technical Research Analyst at Bonanza. Until then, he advised caution and avoiding premature entries. Sustaining above Rs 1,143 could open upside towards Rs 1,220-1,260, while failure to hold may keep the stock range-bound, he added.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)