Jefferies Cuts Paytm Price Target, Maintains 'Buy' Rating Despite Headwinds

• Jefferies reduced Paytm's price target to ₹1,450 from ₹1,600, implying a 25% upside from current levels.
• Paytm shares fell over 8% after no update on the RBI's Payments Infrastructure Development Fund (PIDF) extension, which ended December 31.
• The PIDF scheme contributed ₹128 crore (46% of adjusted EBITDA) to Paytm in H1 FY24, promoting payment infrastructure in smaller towns.
• Jefferies removed PIDF incentives from its FY27-28 estimates, partially offsetting with a 6-7% hike in device subscription fees and cost controls.
• Despite an expected 8-14% decline in adjusted EBITDA, Jefferies maintains a 'buy' rating, citing strong business fundamentals and new revenue streams.

Why It Matters: Jefferies lowered Paytm's price target due to PIDF uncertainty but kept a 'buy' rating, confident in its core business.