Fintech major Paytm Ltd (One 97 Communications) announced its financial results for the second quarter of FY2025-26 on 4th November 2025, showing a contrasting trend of strong revenue growth alongside a sharp profit decline. The company reported a 98% drop in net profit to ₹21 crore, compared with ₹939 crore in the same quarter of the previous fiscal year. However, revenue from operations surged 24% year-on-year to ₹2,061 crore, supported by growth in merchant subscriptions, higher payment volumes, and an expanding financial services portfolio.
Revenue Growth Driven by Merchant and Financial Services Expansion
The company’s revenue increase was primarily fuelled by a rise in high-quality subscription merchants and stronger performance in its financial services sector. Revenue from payment services, including operating income, rose 25% year-on-year to ₹1,223 crore, while net payment revenue grew 28% to ₹594 crore.
Revenue from the distribution of financial services recorded an impressive 63% year-on-year growth to ₹611 crore, largely driven by merchant loan distribution and improved collection efficiency for lending partners. During the quarter, approximately 6.5 lakh consumers and merchants availed financial services through Paytm’s ecosystem.
The company’s gross merchandise value (GMV) grew 27% to ₹5.67 lakh crore, supported by higher payment processing margins, a surge in credit card transactions on UPI, and growing adoption of affordability offerings such as EMIs.
One-Time Impairment Impacts Profit
The sharp fall in profit was attributed to a one-time impairment loss of ₹190 crore related to a loan given to its joint venture, First Games Technology Pvt Ltd, following regulatory changes under the Promotion and Regulation of Online Gaming Act, 2025.
Excluding this one-time impact, Paytm’s profit after tax (PAT) stood at ₹211 crore, reflecting the underlying operational strength of the business.
The company’s total expenses dropped 8% year-on-year to ₹2,062 crore, compared to ₹2,245 crore in the corresponding quarter last year. Marketing costs also saw a significant 42% decline year-on-year to ₹72 crore, highlighting improved customer retention and better monetisation efficiency.
Operating Performance and Margin Improvement
Paytm’s EBITDA rose to ₹142 crore, with a 7% margin, backed by operating leverage and robust top-line growth. Contribution profit stood at ₹1,207 crore, up 35% year-on-year, with a 59% margin — an improvement of five percentage points compared to the previous year.
This performance was supported by a higher share of financial services revenue, improved payment margins, and reduced direct lending and gateway expenses (DLG).
At the end of the quarter, Paytm held a cash balance of ₹13,068 crore, reflecting a strong liquidity position and flexibility for future expansion.
AI-Led Strategy and Future Roadmap
Paytm said it is adopting an AI-first, product-led approach to strengthen its consumer experience and deepen market penetration. The company continues to focus on four key areas:
- Expanding leadership across online and offline merchant networks, including POS devices, QR payments, Soundbox, and payment gateways.
- Scaling financial services distribution with new lending partnerships and AI-driven collection optimisation.
- Continuing AI-powered innovation to enhance user engagement and retention.
- Evaluating select international markets for technology deployment and product expansion over the next two to three years.
Market Overview and Share Performance
Shares of One 97 Communications (Paytm) Ltd closed at ₹1,269.00 on the BSE, down 0.45% after the results were announced post market hours on 4 November 2025. Despite short-term profit pressure, Paytm’s share has delivered 68% returns over the past year and gained 28% on a year-to-date basis in 2025.
The company’s market capitalisation stood at ₹81,054.84 crore, with the stock touching a 52-week high of ₹1,323.30 on 28 October 2025 and a low of ₹652.30 on 11 March 2025.
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Conclusion
Paytm’s Q2 FY26 results highlight a period of strong operational momentum tempered by one-time financial adjustments. While profit declined sharply due to the impairment related to its online gaming venture, the company’s core business continues to show healthy growth across payments, merchant services, and financial products.
With a focus on AI-driven innovation, disciplined cost management, and expanding financial partnerships, Paytm remains strategically positioned to sustain long-term growth and strengthen its leadership in India’s fintech ecosystem.
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