Paytm‘s share price was flat on Friday as the company continues to navigate the regulatory landscape.

What Happened: Motilal Oswal maintained its “neutral” rating for the stock with a price target of ₹530. The target indicates an around 29% upside from the stock’s last closing price of ₹410.

The brokerage said that the recent regulatory restrictions have had a significant impact on Paytm’s business environment and growth prospects. While Paytm boasts extensive reach, its ability to navigate these challenges effectively will largely hinge on its execution capabilities in the upcoming quarters, the analysts remarked.

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The brokerage estimates that Paytm may witness a decline in market share within the overall payments market as a result of these restrictions. This is attributed to a sharp reduction in the high-yielding wallet business, while the impact on financial services, particularly loan origination volumes, is expected to further constrain revenue growth and profitability for Paytm.

The analysts said that they maintain a vigilant stance regarding the ongoing business transition within Paytm and closely monitor the company’s capacity to regain lost business and resume its growth trajectory over FY25-26. Analysts predict an estimated decline in FY25 revenue by 24%, with a corresponding decrease of 30% in contribution profit.

The update comes just days after fellow brokerage firm Yes Securities upgraded Paytm’s rating to a “buy”.

Price Action: Paytm's share price was down 0.049% upper circuit at ₹410.65 in the morning hours of trading on Friday.

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