Paytm Reports First-Ever Quarterly Net Profit of ₹123 Cr in Q1 FY26
One97 Communications, the parent company of Paytm, has reported a net profit of ₹123 crore for the quarter ended June 2025—its first-ever quarterly profit across all key financial metrics. This marks a significant milestone for the fintech company, which has long sought to prove its business viability.
Key Highlights:
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EBITDA stood at ₹72 crore, indicating a strong shift in operational performance.
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Revenue rose to ₹1,920 crore, up 4% quarter-on-quarter and 28% year-on-year.
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Contribution profit jumped 52% YoY to ₹1,151 crore, with margins rising 10 percentage points to 60%, reflecting a healthier revenue mix.
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Net payment revenue surged 38% YoY to ₹529 crore, driven by increased device-based payment subscriptions.
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Financial services revenue doubled to ₹561 crore, supported by strong growth in merchant loans, collections, and income from the DLG model.
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Merchant base expanded to 1.3 crore; operational efficiencies and lower hardware costs led to reduced capital expenditure.
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Cash reserves stood at ₹12,872 crore, providing headroom for future investments, especially in AI and merchant credit.
Despite the performance, the stock dipped 1.6% to ₹1,034.20 on the BSE, likely due to profit-booking after recent gains.
Brokerage Take:
JM Financial has maintained a ‘Buy’ rating on Paytm with a target price of ₹1,320 by June 2026. Analyst Sachin Dixit pointed to the company’s margin improvement and operating leverage, calling this a sign of “business maturity.”
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The brokerage expects Paytm to post a net profit of ₹1,450 crore by FY27, driven by high-margin financial services and monetisation avenues like MDR on UPI and a potential Paytm Wallet revival.
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The stock is valued at 40x FY27 adjusted EBITDA, reflecting a strong long-term outlook.
Management Outlook:
Paytm attributes its turnaround to AI-led efficiencies, rising financial services revenue, and tight cost control. Looking forward, it believes the digital payments market remains under-penetrated, with potential for 10 crore+ merchants in India and 40–50% possibly opting for subscriptions. The company remains optimistic about maintaining high contribution margins and growing profits through scaling and sharper execution.
