Shares of One 97 Communications Ltd, the parent entity of digital payments giant Paytm, surged more than 5% on Wednesday, hitting a new 52-week high of Rs 1,756.20. The significant rally was spurred by the company's clarification regarding its artificial intelligence (AI) strategy and robust financial results for the quarter ended June 30, 2026 (Q1 FY27).
Paytm Clarifies AI Report
The stock's ascent followed Paytm's official response to a media report titled "Paytm Bets on Workplace AI Agents in Pivot Beyond Payments." The company clarified that it has been actively investing in and developing AI capabilities as part of its ongoing business initiatives, including potential "revenue optimization journey of AI." These efforts, Paytm stated, were previously disclosed in its Q1 FY27 earnings release and subsequent earnings call transcript submitted to stock exchanges on July 27, 2026.
Paytm emphasized that the media report did not contain any undisclosed material information requiring disclosure under SEBI regulations, reaffirming its commitment to compliance with all disclosure obligations.
Strong Q1 Financial Performance Fuels Confidence
Adding to the positive sentiment, Paytm reported an impressive financial performance for Q1 FY27. The company's consolidated net profit saw a substantial 79% year-on-year (YoY) increase, reaching Rs 220 crore, up from Rs 123 crore in the same period last year.
Revenue from operations also grew significantly, rising 28% YoY to Rs 2,448 crore in the April-June quarter, compared to Rs 1,918 crore a year earlier. Paytm attributed this strong growth to several factors:
- Higher payment transaction volumes and values.
- Increased merchant subscriptions, particularly driven by its Soundbox devices.
- Growth in revenue from the distribution of financial services, including personal and merchant loans.
Analyst Outlook and Target Price Revisions
Global brokerage firm Bernstein reiterated its 'Outperform' rating on Paytm, raising its target price for the stock to Rs 2,200 from an earlier Rs 1,500. This revised target price now surpasses Paytm's initial public offering (IPO) price of Rs 2,150 for the first time.
Bernstein's updated estimates incorporate the potential introduction of a merchant discount rate (MDR) on UPI transactions, factored into their base-case projections from FY28E, signaling continued optimism for Paytm's future growth trajectory.