Shares of One97 Communications, the parent company of payments aggregator Paytm, jumped 9 per cent on Monday to hit a fresh 52-week high after Bernstein raised its target price on the stock to ₹2,200 from ₹1,500.
The stock closed 9.88 per cent higher at ₹1,584.10 on the NSE, after hitting a 52-week high of ₹1,598.50, compared with the previous close of ₹1,441.60.
Bernstein retained its outperform rating, citing the potential impact of Merchant Discount Rate (MDR) on UPI transactions from FY28 onwards.
The brokerage said it was moving UPI MDR from an “optionality” to its base case from FY28E. The brokerage assumes around 35 basis points MDR on a subset of UPI P2M transactions.
It expects Paytm could capture 3-4 basis points of incremental net payment margin from UPI MDR. Bernstein also raised its FY30E EPS estimate by around 30 per cent to ₹106.
The brokerage expects MDR to add ₹13.2 billion, ₹16.9 billion and ₹21.6 billion to EBITDA in FY28E, FY29E and FY30E, respectively.
Bernstein forecasts Paytm’s GMV to rise from ₹30.9 trillion in FY27E to ₹56.6 trillion by FY30E.
The brokerage said the key risk now shifts to how much of the MDR Paytm retains amid competition and take-rate pressure.
Over the weekend, the government said consumers will not have to pay charges for UPI transactions.