Paytm shares surged to a year-high after Bernstein raised its target price, citing the potential return of MDR charges on UPI payments and technical signs of a breakout, signalling renewed investor confidence.
Paytm shares climbed as much as 9% on Monday, touching a 52-week high after Bernstein lifted its target price to ₹2,200 from ₹1,500 and kept its outperform rating. It is the first time the brokerage has placed a valuation on the stock above Paytm’s ₹2,150 IPO price, underscoring a sharp shift in sentiment after the stock’s long decline from its listing peak and its slide below ₹300 in February 2024.
Bernstein’s case centres on the possible return of merchant discount rate, or MDR, charges on some UPI payments. The firm said it is now folding that possibility into its base forecasts from FY28 onwards, arguing that even a narrow charging framework could lift Paytm’s payments economics. In its latest note, Bernstein said MDR could add 3 to 4 basis points to net payments margins and lift FY30 earnings per share by about 30%.
The brokerage also estimated that MDR could apply to about half of transaction value, potentially adding about ₹2,200 crore in incremental EBITDA by FY30. The change follows recent legislative moves removing the statutory ban on charging MDR on UPI transactions, which has shifted the discussion from whether the charge will return to when and in what form. Paytm management had already signalled last year that the industry was watching the issue closely, noting that some UPI-linked instruments already carried merchant charges and that any future incentive or fee structure could reshape monetisation.
Technical analysts have also turned more constructive on the stock. Axis Direct described Paytm as a top pick in its Diwali Muhurat technical report, saying the shares had broken above a long downtrend and were showing a series of higher highs and higher lows. The broker set a target range of ₹1,535 to ₹1,585 with a stop loss at ₹1,343, while earlier reports from Axis and JM Financial had also pointed to upside from regulatory triggers such as MDR, changes at Paytm Payments Bank and fresh payment licences.
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