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Paytm's UPI MDR Boost: Target Price Soars
10 Aug
Summary
- Bernstein raised Paytm's target price to Rs 2,200.
- UPI MDR may add Rs 2,160 crore to EBITDA by FY30.
- Consumers won't be charged for UPI transactions.
Global investment research firm Bernstein has reiterated its 'Outperform' rating on Paytm's parent, One97 Communications, significantly increasing its price target to Rs 2,200 from Rs 1,500. This adjustment is driven by the firm's updated estimates regarding the potential introduction of Merchant Discount Rate (MDR) on UPI transactions.
Bernstein now incorporates UPI MDR into its base case projections from FY28, anticipating approximately 35 basis points on certain person-to-merchant (P2M) UPI transactions. The firm forecasts that this could add between Rs 1,320 crore and Rs 2,160 crore to Paytm's EBITDA by FY30, and has also revised its FY30 earnings per share forecast upwards by 30% to Rs 106.
This development follows government clarification that consumers will not incur charges for UPI transactions. Any newly introduced MDR would exclusively apply to specific merchant transactions exceeding a certain threshold, aiming to support crucial investments in UPI infrastructure, cybersecurity, and fraud prevention.
As of June 2026, Paytm maintained its position as the third-largest UPI player, processing 1.80 billion transactions. While the stock has gained approximately 20% year-to-date in 2026, it has not yet reached its IPO issue price of Rs 2,150 from July 2021.
