There are many methods for preparing this.
I am giving a method where milk is used.
Khus khus - 2 tbsp
Coconut - ½ cup
Sugar - ¾ cup ( or to taste)
Milk - 2 cups
Cardamom powder - 1 tsp
Saffron - ¼ tsp (warm &powder)
Lightly roast khus khus. ( this step is optional).
Soak for 1 hour & grind fine with coconut.
Mix some water & cook it to a paste on a kadai till raw taste goes.
In another stove mix 1 cup water with sugar & heat to dissolve.
Add that to the khus khus coconut mixture.
Mix & cook for a few mts.
Add cardamom powder, saffron & remove.
Add boiled milk & stir thoroughly.
Variations:
You can add some cashews when grinding to get a rich taste.
You can soak 2 tsp rice with khus khus & grind to get a thick payasam.
You can add jaggery instead of sugar.
Instead of grinding coconut, extract milk & use that instead of milk.