Goldman Sachs backs Paytm; expects it to be profitable in March quarter

One 97 Communications, popularly knows as Paytm, has been under pressure from investors to achieve profitability.

Goldman Sachs expects Paytm to report a strong third quarter, which will put it on track to achieve EBITDA profitability (before accounting for employee stock ownership plans costs) by the fourth quarter.

The global investment bank has reiterated a "Buy" rating on Paytm with a revised target price of Rs 1,120 against an earlier estimate of Rs 1,100.

The foreign brokerage sees risk-reward skewed to the upside for Paytm shares. Paytm’s valuation multiples are at a discount to global peer group, for a growth outlook that is better or in-line with peer group, Goldman Sachs said.

The stock of One 97 Communications, since its initial public offering in November 2021, has plunged by more than 65% to around Rs 537.