Paytm shares up 17% so far in 2025. Should you ride the rally or wait for a dip?
, which operates fintech platform
Paytm
, has surged 17% so far this year, on top of a 128% jump over the past 12 months, leaving investors wondering whether the rally still has legs or if it's time to wait for a pullback. The stock has climbed 21% in the past month alone, including a 9.5% jump this week, underscoring bullish sentiment that has pushed it above all eight of its key moving averages and kept its technical indicators in overdrive.
The latest boost came Wednesday, when shares rallied nearly 5% to a new 52-week high of Rs 1,173.70 after the Reserve Bank of India granted in-principle approval to its wholly owned subsidiary,
Paytm Payments Services
Ltd, to operate as an online payment aggregator. The move also lifts the merchant onboarding ban imposed in November 2022, removing a major regulatory overhang.
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The RBI approval is contingent on compliance with its Payment Aggregator and Payment Gateway guidelines, and requires a comprehensive system and cybersecurity audit by certified professionals. Certain transactions such as merchant 'pay-outs' must not be routed through escrow accounts meant for PA operations.
Regulatory relief follows profit turnaround
In July, Paytm posted a consolidated net profit of Rs 122.5 crore for the first quarter of FY26, reversing a Rs 839 crore loss a year earlier. Revenue from operations climbed 28% year-on-year to Rs 1,917 crore during the quarter, while contribution profit rose 52% to Rs 1,151 crore, lifting the margin to 60%. The company ended the quarter with Rs 12,872 crore in cash.
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Net payment revenue grew 38% to Rs 529 crore during June 2025 quarter, and revenue from distribution of financial services doubled to Rs 561 crore. Merchant device subscriptions stood at 1.30 crore across MSMEs and enterprise payment merchants.
Analysts weigh in
Laxmikant Shukla, Senior Manager, Technical Analyst at YES Securities, said the stock has 'shown impressive bullish strength, breaking past its previous monthly high of Rs 1130 levels.'
'Despite some profit booking yesterday, it remains above the breakout zone… any dips towards this support zone could be a buying opportunity. The stock is targeting new highs with a potential near term target of Rs 1235,' said Shukla.
Nilesh Jain, Head of Technical and Derivatives Research at Centrum Broking, noted Paytm's 'multi-year breakout above the Rs 1,050 mark' and said the structure 'remains bullish with potential to move beyond Rs 1,250,' but cautioned that 'the recent sharp rally has made the risk–reward ratio less attractive at current levels.'
Mandar Bhojane, Senior Research Analyst at Choice Broking, pointed to a breakout from a Cup and Handle pattern and said: 'A sustained move above Rs 1160 could pave the way for upside targets of Rs 1300 and Rs 1400, while immediate support at Rs 1120 and Rs 1080 offers attractive buy-on-dips opportunities.'
Bhojane flagged Rs 1200 and Rs 1250 as resistance levels where profit booking could emerge.
Drumil Vithlani, Technical Research Analyst at Bonanza, cited a flag and pole breakout with a near-term target of Rs 1,220–Rs 1,250 and possible extension to Rs 1,300.
Vithlani said the RBI approval and Q1 profit 'remove a major overhang… improving merchant acquisition prospects and boosting payment volumes,' but warned that risks include 'profit booking due to overbought RSI levels, potential adverse regulatory developments, and execution challenges.'
Technical setup
Paytm's RSI stands at 68.9, just shy of overbought territory, while MACD is at 35.8, above the center line but below the signal line. The stock trades above its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day and 200-day simple moving averages, signalling bullish undertones in both the short and long term.
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Paytm shares surge 5% to 52-week high as RBI grants payment aggregator licence to subsidiary
(
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: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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