Paytm shares rally 31% so far in 2025. Analysts say Rs 1,420 within reach. Should you buy?

Shares of One 97 Communications, which operates fintech platform Paytm, have surged 31% in 2025, propelled by the company’s first-ever quarterly profit and a technical breakout. Investors are now weighing whether the stock’s momentum can continue, as analysts point to near-term targets of up to Rs 1,420.

One 97 Communications had swung to a consolidated net gain of Rs 122.5 crore in Q1 FY26, reversing a Rs 839 crore loss in the year-ago period. Revenue from operations rose 28% to Rs 1,917 crore, driven by more subscription merchants, higher gross merchandise value, and growth in financial services distribution. Sequentially, topline edged up 0.3% from Rs 1,911 crore in Q4FY25, which had recorded a Rs 540 crore loss.

Contribution margins jumped to 60%, while EBITDA margins turned positive at 4%, marking a milestone for the company. Analysts note that part of the gain stems from structural changes in Paytm’s lending business, which may limit repeatability in FY27.

Paytm also received in-principle approval from the Reserve Bank of India to operate as an online payment aggregator, allowing the company to directly onboard merchants rather than rely on third-party platforms. While this provides a sentiment boost, large online merchants already have established relationships with rival aggregators, limiting immediate revenue impact.

Technical breakout signals strength

Shares are trading above all eight key simple moving averages, including the 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day SMAs. "Paytm has witnessed a strong recovery, with the price sustaining above the key moving averages of 20, 50, and 200 days, thereby confirming a solid uptrend," said Ajit Mishra, SVP, Research at Religare Broking.

"The recent breakout above the Rs 1,200 zone has been supported by healthy momentum and an improving RSI, indicating the potential for further upside." Mishra said that immediate support lies near Rs 1,190, with a stronger base around Rs 1,050.

The Relative Strength Index stands at 69.3, just below overbought levels, while the MACD remains above the center line at 56.9 but below the signal line.

For short-term traders, Drumil Vithlani, Technical Research Analyst at Bonanza, said, "Near-term target is Rs 1,380–1,420 over the short term (1–3 weeks), provided the stock sustains above Rs 1,240. Immediate support: Rs 1,240–1,250 zone (near 9 EMA & breakout retest area). Next strong support: Rs 1,150. Immediate resistance: Rs 1,320–1,340. Next target: Rs 1,400–1,420."

Broader chart patterns suggest further upside

Mandar Bhojane, Senior Research Analyst at Choice Broking, said, "Paytm has confirmed a breakout from an inverted head and shoulders formation, indicating a bullish reversal setup… A sustained move above Rs 1,290 could extend the rally towards Rs 1,400 and Rs 1,600, with immediate support placed at Rs 1,240."

"Momentum indicators are supportive… Resistance is likely around Rs 1,400 and Rs 1,500, where short-term profit booking may emerge. For long-term investors, the broader structure indicates a potential target of Rs 1,800. On the downside, Rs 1,200 remains the critical support level. Traders can look for fresh entries at current levels or on dips, with a protective stop-loss at Rs 1,200," said Bhojane.

Paytm’s first profitable quarter, combined with the RBI approval and technical breakout, provides strong near-term tailwinds. Yet analysts caution that some gains reflect temporary structural changes in its lending business. While charts and target prices suggest potential to Rs 1,400–1,420 in the near term, investors should monitor support levels and remain mindful of profit booking.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)