Paytm Share Price Climbs 25% In Three Weeks As UPI MDR Hopes Drive Re-Rating

The Paytm share price has moved sharply higher in recent weeks, with the stock reaching ₹1,605 on Tuesday. The rally has followed upgrades and target-price revisions from global brokerages, which have factored potential monetisation of UPI transactions into their forecasts.

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The policy change, however, has not been finalised. Any eventual MDR framework, including its rate and coverage, will determine the extent to which the potential revenue opportunity translates into Paytm’s earnings.

Bernstein Sets Target Above IPO Price

Bernstein raised its target price for Paytm to ₹2,200, marking the first time a global brokerage has set a target above the company’s IPO price. The brokerage has incorporated UPI MDR into its base case from FY28.

Bernstein estimates that an MDR of 35 basis points, applied to about 50% of UPI transaction value, could generate nearly ₹2,200 crore in incremental EBITDA by FY30. It also estimates that the additional revenue could lift FY30 earnings per share by around 30% compared with its earlier projections.

The Paytm share price has therefore become a key focus as investors assess how much of the potential policy benefit is already reflected in the stock.

Jefferies, Citi Raise Earnings Expectations

Jefferies increased its target price to ₹1,600 from ₹1,450 and raised its earnings estimates. It expects Paytm’s revenue to compound at 25% annually between FY26 and FY29, while EBITDA margins could expand from 6% in FY26 to 18% by FY29.

The brokerage also sees potential upside if MDR is introduced for higher-value UPI transactions. Citi has similarly identified scope for stronger earnings if the proposed change is implemented.

UPI payments currently carry no merchant MDR. Credit card transactions generally attract MDR of around 1.5%, while debit card transactions can carry charges of up to 0.9%.

Proposed MDR Could Cover High-Value Transactions

Reports indicate that the government is considering an MDR of 0.3% to 0.5% on UPI transactions above ₹2,000 for merchants with annual turnover exceeding ₹1.5 crore.

Jefferies estimates transactions above ₹2,000 represent about 4% of merchant payment volumes but account for roughly 67% of transaction value. It estimates that an MDR on such payments could create a ₹5,000-10,000 crore revenue pool for the payments industry.

Strong June Quarter Supports Sentiment

Paytm’s latest results have also strengthened the case for higher earnings expectations. Net profit increased 20% quarter-on-quarter, marking the fifth consecutive profitable quarter, while revenue rose 8%.

EBITDA climbed 54% sequentially, taking the margin to 8% from 6%. The company reported its highest quarterly EBITDA, supported by merchant GMV growth and performance across payments and financial services.

Goldman Sachs expects Paytm’s EBITDA margin to double by Q1 FY28, while Morgan Stanley estimates margins could reach about 19% by FY29.

For now, UPI MDR remains a potential revenue opportunity rather than a confirmed earnings stream, leaving the policy decision as an important factor for the Paytm share price.