New Delhi [India], October 6 (ANI): Global brokerage BofA expects Paytm to report another strong quarter in Q2 FY27, with revenue and profitability likely to remain on an upward trajectory, supported by growth in payments and financial services.
BofA estimates Paytm’s Q2 revenue at Rs 2,641 crore, representing 28 per cent year-on-year and 8 per cent quarter-on-quarter growth. Payments revenue is expected to rise 31 per cent year-on-year, while financial services revenue is projected to grow 44 per cent.
The brokerage expects profitability to improve further, estimating net income at Rs 271 crore, up 76 per cent year-on-year and 23 per cent sequentially. EBITDA is estimated at Rs 263 crore, an 86 per cent year-on-year increase, with the EBITDA margin expected to expand by 166 basis points sequentially to 10 per cent, aided by lower fixed costs.
BofA described its Q2 outlook as “consistent growth, margins again to improve” and reiterated its Buy rating on the stock. It expects Paytm’s EBITDA to record an 82 per cent compound annual growth rate between FY27 and FY29.
On the payments side, the brokerage expects gross merchandise value (GMV) to grow 8 per cent sequentially and estimates 0.5 million Soundbox additions during the quarter. This is expected to support continued expansion in the company’s payments business.
Financial services is expected to remain another key growth driver, with merchant lending accounting for a significant part of the projected increase. BofA also noted that “even consumer lending from a low base is scaling well”, pointing to improving traction beyond merchant lending.
The brokerage expects Paytm’s commerce and cloud services business to recover, modelling 7 per cent quarter-on-quarter growth.
BofA said Paytm has been positively impacted by the 40 basis points merchant discount rate (MDR), which takes effect from October 15. Better UPI market share, potential benefits from MDR and stronger-than-expected traction in lending and the merchant business were highlighted as potential upside factors.
The outlook builds on Paytm’s Q1 FY27 performance, when the company reported revenue growth of 28 per cent year-on-year to Rs 2,448 crore and its highest-ever quarterly EBITDA of Rs 203 crore, up 182 per cent. Net profit rose 79 per cent to Rs 220 crore, following Rs 184 crore in Q4 FY26. BofA’s Q2 estimate of Rs 271 crore would mark another sequential increase in profitability. (ANI)
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