Paytm has been in the news and brokerage firms are taking a relook at their current rating. While some are downgrading it, some still see a case for profit.

The broking firm Jefferies expects a 28% decline in One97 Communication’s revenue in the financial year, which will in turn lead the company into cash burns. The brokerage house nullifies the rating and target price on the company from underperform earlier till there’s any clarity.

According to Jefferies, the company will now focus on customer retention including merchants, which take a hit on the company’s cash reserves. The company will start spending the Rs 8500 crore cash reserves just to retain users. 

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“Without a banking license, PAYTM’s business model will now become similar to pure payment service providers like PhonePe, GPay, Pine Labs, etc,” said a research report by Jefferies.

However, another broking firm Morgan Stanley sees the company as attractive and has given an “Equal-Weight” rating to the stock. The brokerage has a target price of Rs 555. 

“We apply adjusted F2026e EV/sales multiples of 2.6x base, 1.9x bear, and 3.6x bull, and derive EV, which we discount to Mar-26 at a 13.9% WACC,” said the broking firm in a research report.

On the risk side, Morgan Stanley sees the negative impact from changes to digital payment charges, weak execution on the financial side, and higher than expected competitive intensity in payment and reduction in payment charges.