Paytm building one of India’s strongest fintech business models : Citigroup
Global brokerage firm Citigroup has turned increasingly positive on Paytm, highlighting strong momentum across payments, merchant business, lending and profitability, citing ‘plenty of growth and margin drivers’ for the fintech major.
In its latest report after hosting Paytm’s management at the Citi Pan Asia Conference 2026, the brokerage maintained a Buy rating on the company with a target price of Rs 1,380, implying meaningful upside from current levels.
The brokerage said Paytm continues to benefit from multiple structural growth drivers across India’s digital payments ecosystem, including Credit on UPI, online payment gateways, card EMI adoption and merchant monetisation opportunities.
Citi added that the competitive environment remains disciplined, supporting a steady improvement in payment margins.
According to the report, Paytm’s consumer payments business is also gaining momentum.
The company’s consumer payments growth during FY26 was nearly double the market growth rate. Monthly transacting users increased to 77 million, reinforcing Paytm’s continued scale in India’s digital payments ecosystem.
Citi highlighted Paytm’s growing merchant ecosystem as another major strength.
The company added nearly 3 million merchant devices during FY26 and now has around 15 million devices deployed across the country.
The brokerage said Paytm still has significant room for expansion and could also explore international opportunities in markets such as Southeast Asia.
The report also pointed to improving monetisation trends within payments.
Citi noted that Paytm’s net payment margins currently stand at around 4 basis points, meaning even relatively small contributions from high monetisation products such as RuPay cards, Credit on UPI and Postpaid can have a meaningful impact on overall profitability.
In financial services, Citi said Paytm’s merchant lending business continues to see strong structural tailwinds. The brokerage highlighted that only around 7% of Paytm’s merchant base currently uses merchant loans despite nearly 40% being eligible, indicating substantial headroom for future expansion.
The report further noted that Paytm is investing in AI-led product development across wealth and broking services, as the company prepares for evolving consumer expectations in digital financial services.
Citi added that Paytm’s large merchant network, repeat user engagement and scale advantages continue to create a strong competitive moat, while improving operating leverage and disciplined execution could further strengthen the company’s profitability profile over the coming years.
