Bernstein raises Paytm target on UPI MDR

Global brokerage Ben Bernstein raised its target price on One97 Communications, the parent of Paytm, to Rs 2,200 from Rs 1,500, retaining an Outperform rating. This is the first brokerage target above Paytm's IPO price of Rs 2,150. The revision incorporates the potential introduction of a Merchant Discount Rate (MDR) on UPI transactions into its base-case forecasts from FY28, estimating a 3-4 basis point improvement in net payments margin and a 30% increase in FY30 EPS. Paytm shares rallied up to 10% to a 52-week high following the upgrade. The move follows recent government commentary and legislative changes that removed the statutory prohibition on charging MDR on UPI, shifting the debate from whether MDR will be introduced to when and in what form. Paytm also reported strong Q1 FY27 results with net profit up 79% year-on-year to Rs 220 crore, and its board decided against a bonus issue while approving an additional Rs 100 crore investment in One97 Communications — Paytm Money.