PAYTM share price was trading firm, nearly its one month highs. The stock has finally witnessed a positive breakout above Rs 900 levels and the next major resistance is in Rs 975 - 985 range. One97 Communications shares have surged more than 160% in the past year, reclaiming market confidence following steep drawdowns in prior quarters. The rally, fueled by a strategic international foray into Singapore and a shift in investor sentiment, has prompted renewed interest from institutional buyers and market analysts alike. Yet, under the surface, profitability remains elusive, and policy ambiguity continues to cast shadows over its long-term growth path.

Resilient Price Action Amid a Transformative Year

In recent trading on June 4, 2025, Paytm’s stock climbed as much as 2.4% intraday to Rs950.75 on the BSE. Despite broader market headwinds and a 3% decline over the last 12 months, the stock has regained significant ground—up over 34% in the last three months and 13% in the past month alone. These gains come as the benchmark Sensex has advanced about 12% over the same period, highlighting Paytm’s impressive relative strength.

From a technical standpoint, the stock recently broke out of a classic “cup and handle” formation, often seen as a bullish signal. The Relative Strength Index (RSI) currently stands at 63.79, suggesting there’s room for further upside before entering overbought territory.

Strategic Push Beyond Borders: Singapore Subsidiary Announced

A major catalyst behind Paytm’s resurgence was its announcement of a new overseas subsidiary: Paytm Singapore Pte. Ltd., incorporated with an initial capital of SGD 250,000. This marks a pivotal step in Paytm’s ambitions to tap Southeast Asia’s burgeoning digital payments market. By planting roots in Singapore—a regional fintech hub—Paytm aims to diversify revenues and reduce reliance on its core Indian operations.

This move is being interpreted not only as geographic diversification but as a signal of intent. The company is actively seeking international avenues to build sustainable earnings, a strategy that aligns with broader investor expectations for margin improvement and reduced regulatory dependency.

Financial Snapshot: Closer to Breakeven, But Challenges Persist

Paytm’s Q4 FY25 earnings told a mixed story. The consolidated net loss stood at Rs540 crore, slightly better than the Rs550 crore loss recorded in Q4 FY24. However, the figure deteriorated from the Rs208 crore loss reported in Q3 FY25.

Crucially, Rs522 crore of that quarterly loss stemmed from exceptional items, such as ESOP acceleration costs and asset impairments. Adjusted for these, Paytm reported a minimal loss of Rs23 crore—signaling operational breakeven is within reach.

Revenue from operations declined 16% year-on-year to Rs1,912 crore, but rose nearly 5% sequentially. Contribution profit improved 12% quarter-over-quarter, supported by reduced payment processing costs and operational streamlining.

Margins Supported by Incentives, but Uncertainty Lingers

One-time incentives played a role in margin maintenance. Paytm received Rs70 crore in UPI acquiring incentives in Q4 FY25, helping to stabilize net payment margins. Excluding this, the company still posted a 4% sequential margin increase—evidence of improving cost dynamics.

Yet, this area remains precarious. Government payouts for UPI incentives have been lower this year, and Paytm has flagged the lack of clarity around merchant discount rates (MDR) as a risk. A future policy decision allowing MDR for large UPI transactions could dramatically enhance revenue generation in this segment.

Analyst Commentary: Bullish Near-Term Targets Amid Mixed Ratings

Analysts are cautiously optimistic. On June 2, Harshita Darak of Bonanza recommended a buy between Rs920–924, citing positive price structure and technical confirmation. Her suggested targets range between Rs975 and Rs1,025, with a stop loss at Rs895.

Simultaneously, Aakash Hindocha of Nuvama Wealth issued a buy call with a target of Rs985 and a stop loss of Rs852. He noted a favorable risk-reward profile supported by a bullish setup.

According to a recent Economic Times roundup, out of 16 covering analysts, five rate the stock a “Strong Buy,” while three recommend “Sell”. The rest are split between “Buy” and “Hold.” JM Financial, in its June 4 note, set a target range of Rs1,010–1,070, aligning closely with consensus estimates.

Ownership Dynamics Reflect Growing Domestic Conviction

A notable trend is the shifting ownership structure. Domestic institutional investors increased their stake from 7.04% to 14.01% over the past year, indicating rising local confidence in the firm’s turnaround story. In contrast, foreign institutional holdings slipped slightly from 58.24% to 55.39%, a marginal but meaningful rebalancing.

This evolution suggests a stronger alignment with domestic market sentiment and risk tolerance, especially as Paytm navigates India-specific policy frameworks.

Fundamental Risks: Profitability, Policy, and Competition

While the outlook has improved, several challenges remain. Paytm’s return on equity (ROE) has been negative for three consecutive years, and FY25 marked the first year in three that sales contracted—down 27.55%.

High operating costs persist. Employee expenses constitute nearly 48% of operating revenue, and while interest obligations are low, the company remains under pressure to achieve scalability in financial efficiency.

Regulatory issues also loom large. The fintech major secured temporary relief via a Supreme Court stay on a Rs5,712-crore GST notice against its First Games unit, but such overhangs can be unsettling for investors. Additionally, upcoming NPCI rules, such as UPI API usage restrictions (effective August 1), could influence transaction volumes.

Looking Ahead: Four Catalysts That Could Drive Next Phase

Policy Clarity on MDR: If allowed, even a minimal MDR on high-value UPI transactions could significantly enhance payment margins.

Geographic Diversification: The Singapore expansion could open doors to revenue in mature, high-spending fintech markets.

Cost Optimization: Continued discipline in reducing payment processing and employee overheads will be vital to breakeven objectives.

Financial Product Innovation: New offerings in credit, insurance, or wealth management could serve as high-margin growth drivers.

Analyst Recommendation Table

Conclusion: Paytm’s Next Chapter Hinges on Execution

Paytm’s remarkable resurgence in 2025 is a testament to resilient market dynamics, investor belief in technology-led financial services, and shrewd corporate strategy. However, the road ahead remains nuanced. Operational improvements and international expansion will need to translate into consistent profitability. Simultaneously, policy developments—particularly around UPI MDR—will be pivotal.

For now, the market has granted Paytm the benefit of the doubt. Analysts lean bullish, technicals are supportive, and domestic institutions are building exposure. But whether Paytm can transform short-term momentum into long-term sustainability will define its place in India's digital economy evolution.