JM Financial Reaffirms 'Buy' on Paytm Despite PIDF Concerns, Sees Muted Impact

• JM Financial views market reaction to PIDF incentive renewal concerns as premature and exaggerated, reiterating a 'Buy' rating on Paytm.
• Paytm's stock saw a sharp correction after a DRHP highlighted unrenewed PIDF incentives, but no official RBI communication on termination exists.
• Even with PIDF discontinuation, Paytm plans offsetting measures like subscription price hikes, setup fees, and reduced deployment costs.
• JM Financial estimates net revenue impact of 2.6% in FY27 and 2.2% in FY28, with EBITDA impact limited to 10.7% and 4.9% respectively.
• The firm maintains its FY28 EBITDA estimate of Rs 25.9 billion for Paytm, projecting 25% CAGR revenue growth and tripled EBITDA over two years.

Why It Matters: JM Financial maintains 'Buy' on Paytm, believing PIDF concerns are overblown and financial impact will be minimal.