One97 Communications, the parent of Paytm, is on the cusp of a dramatic earnings boost that could reshape its valuation.
Amit Gupta, director of equities at Motilal Oswal Private Wealth, estimates that the introduction of merchant‑side and consumer‑side charges on Unified Payments Interface (UPI) transactions could add ₹600 crore to the company’s EBITDA. This figure is broken down into ₹400 crore from merchant‑side fees and ₹200 crore from consumer‑side fees, derived from a projected eight‑basis‑point charge on a ₹5 lakh crore gross merchandise value at a 20% market share.
The ₹600 crore injection would lift EBITDA by nearly 60% over the ₹1,000 crore that One97 currently expects from its existing business, a jump that eclipses typical earnings expectations for a company of its size.
UPI’s dominance in the digital payments arena—accounting for 50‑60% of transaction volume—provides a safety net against volume erosion, a point Gupta stresses when discussing the risk profile of the proposed fees.
Analysts have taken note of this upside, pricing the stock at 18x FY28 earnings, a premium that reflects the potential uplift but also the regulatory uncertainty surrounding the fee rollout.
The next critical development will be the Reserve Bank of India’s decision on UPI charges, expected within the third quarter of 2026, which will determine whether the projected ₹600 crore materializes and whether the 18x multiple remains justified.
Investors watching One97 should monitor the RBI announcement closely, as the outcome will either validate the aggressive upside or force a reassessment of the company’s valuation trajectory.