Paytm, the Indian multinational financial technology company, is poised to witness a turnaround riding on its strong merchant ecosystem and rising traction in financial services. As per the analysts at One97 Communications, the company behind Paytm, is set to exhibit a 22% CAGR in revenues and positive EBITDA by FY26.

As per the analysis by Motilal Oswal, Paytm’s pivot toward financial services, cost controls, and device-led merchant expansion will drive a fundamental shift in its business model. This would expand the contribution margin by around 58 percent by F28, higher than the current levels, while making a net profit of Rs 1,620 crore in FY28. Accordingly, the financial services segment is set to contribute around 27 percent of the total revenue by FY28, up 250 basis points from FY24. 

Likely Rebound in Payment Revenue

Following a steep drop in payment revenue in FY25, Paytm is expected to see a 17% rebound in FY26. Its gross merchandise value (GMV) is projected to grow at a 23% CAGR between FY25 and FY28, fueled by deeper merchant integration and wider device deployment. This shows a positive stride in the company’s business prospects, looking at the rebounding figures. The rebound suggests good retention in the businesses. 

Paytm’s merchant base grew 8% year-on-year to 44 million in Q4 FY25, while device deployments rose 16% to 12.4 million. According to the report, this expanded merchant infrastructure—alongside a stronger focus on high-GMV merchants—positions the company to enhance monetization and accelerate lending growth. 

Customer Onboarding Makes a Comeback

Paytm has resumed customer onboarding and is witnessing stabilization in Monthly Transacting Users (MTUs) after three straight quarters of decline. Backed by new lending partnerships and improving credit appetite, personal loan disbursements are expected to pick up in the second half of FY26. 

Paytm Under Scrutiny 

Paytm’s performance is under scrutiny alongside peers like Zomato and PB Fintech, which have turned profitable and delivered returns of 245% and 156%, respectively, over the past two years. While Motilal Oswal sees a clear path to profitability, it maintains a ‘Neutral’ rating on the stock, with a revised target price of ₹1,000, valuing it at 20x FY27 EBITDA.