One97 Communications Ltd [NSE: PAYTM], the parent company of Paytm, reported a net profit of ₹122.5 crore for the first quarter of FY26, marking a significant rebound from a ₹838.9 crore loss during the same quarter last year. This also represents Paytm’s first profitable quarter since September 2024.
The company attributes its strong performance to artificial intelligence (AI)-led operating leverage, a disciplined cost structure, and an increase in other income.
Key Financial Highlights for Q1 FY26
- Net Profit: ₹122.5 crore, a recovery from the ₹838.9 crore loss in Q1 FY25
- Revenue from Operations: ₹1,917.5 crore, up 27.7% YoY from ₹1,501.6 crore in Q1 FY25
- Total Expenses: ₹2,016.1 crore, down from ₹2,476.4 crore in Q1 FY25
- Earnings Per Share (EPS): ₹1.92 (basic), ₹1.89 (diluted)
Revenue Growth and Key Drivers
Revenue from operations increased to ₹1,917.5 crore, reflecting a 27.7% YoY growth from ₹1,501.6 crore in Q1 FY25. On a quarter-on-quarter basis, the revenue showed a slight increase from ₹1,911.5 crore in Q4 FY25. The growth was driven by an increase in the number of subscription merchants, higher gross merchandise volume (GMV), and growth in financial services distribution revenues.
One97 Communications saw a significant rise in subscription merchants, which now total 1.30 crore. This growth demonstrates the expanding adoption of Paytm’s payment solutions. The company is optimistic about the future, projecting that there is potential for over 10 crore merchants to accept payments through Paytm, with 40-50% of them likely to need subscription services to manage their business.
Cost Structure and Profitability
The company managed to reduce its total expenses to ₹2,016.1 crore during the quarter, a reduction of 18.6% compared to ₹2,476.4 crore in Q1 FY25 and a 7.6% reduction from ₹2,154.9 crore in Q4 FY25. This reduction in expenses, alongside higher revenue, contributed to the company’s strong profitability.
The earnings before interest, taxes, depreciation, and amortisation (EBITDA) also showed positive results, turning profitable at ₹72 crore, a 4% margin.
Growth in User Base and Market Position
One97 Communications saw a growth in its monthly transacting users, which reached 7.4 crore during the quarter. This reflects an increasing user base for Paytm’s services, particularly in its digital payments segment.
The company remains focused on monetising its growing merchant ecosystem, with continued investments in AI and tech infrastructure to improve services and expand its user base.
Stock Performance and Market Sentiment
On 22 July 2025, shares of One97 Communications closed at ₹1,052.6 per share on the BSE. The positive quarterly results have helped boost investor sentiment, reflecting confidence in the company’s future prospects.
Conclusion
One97 Communications’ Q1 FY26 results demonstrate a remarkable turnaround, with a net profit of ₹122.5 crore, following a series of strategic initiatives, including AI-led operating leverage and a disciplined cost approach. The company’s strong revenue growth driven by subscription merchants and gross merchandise volume positions it well for continued growth in the coming quarters.
With strong cost management and an expanding user base, One97 Communications is well-placed to capitalise on emerging opportunities in the digital payments and financial services sectors.
