Paytm Profit Rises 971% to 225 Crore Rupees in Second Quarter
Key Facts
Paytm reported profit after tax of 225 crore rupees in the second quarter of fiscal 2027, ended September 30, 2026, compared with 21 crore a year earlier, an annual increase of 971%, according to the company’s official results release. Operating revenue reached 2,648 crore rupees, up from 2,061 crore a year earlier, an annual increase of 28% and a quarterly rise of 8%. However, the expansion in reported profit alone does not reflect improved operating performance, as exceptional items fell to 4 crore rupees from 190 crore. Profit before these items was 229 crore rupees, compared with 211 crore a year earlier, an increase of 9%. This comparison puts growth in underlying profitability in a more moderate context than the annual surge in net profit.
Earnings before interest, taxes, depreciation and amortization rose to 270 crore rupees from 142 crore, an annual increase of 90%, while the margin widened to 10% from 7%. On a comparable measure excluding the PIDF incentive, the company said the margin rose to 10% from 3%, an annual increase of 637 basis points. This coincided with growth in payments and financial services distribution, the two largest revenue drivers identified in the official release. Revenue from payment services rose 25% to 1,434 crore rupees from 1,146 crore. Revenue from financial services distribution increased 49% to 912 crore from 611 crore, posting a faster growth rate than the payments business.
Expansion also extended to usage and merchant metrics. Average monthly transacting users reached 8.5 crore in the quarter, up 13% from 7.5 crore a year earlier and 6% from 8.0 crore in the previous quarter; the company said this was the highest level in about three years. The number of merchants subscribed to services and devices rose to 1.64 crore at the end of the quarter, from 1.37 crore a year earlier and 1.57 crore in the previous quarter, an annual increase of 19% and a quarterly rise of 5%. Gross merchant payment value also increased to 7.1 lakh crore rupees from 5.7 lakh crore, up 26% year over year. These metrics link revenue growth to increased activity across the user and merchant base, alongside expansion in financial services.
Paytm said artificial intelligence applications across its businesses are “accelerating revenue growth and improving cost efficiency,” and that revenue and contribution profit are growing faster than indirect expenses. The company presents technology as supporting efficiency, alongside growth in financial services distribution and improved payment-processing economics. It expects near-term pressure on contribution margin, however, saying that costs related to expected credit loss guarantees will rise materially from the third quarter of fiscal 2027, with seasonal factors also having an impact. It added that it expects contribution margin to decline in that quarter, but anticipates continued improvement in earnings before interest, taxes, depreciation and amortization despite the higher costs. This puts the coming profitability trajectory against a mix of continued operational improvement and higher costs in the next period.
Regarding proposed fees on select UPI transactions, the company said they could lift the payment-processing margin by about 2.5 basis points, and that it expects the actual impact to stabilize within 2–3 quarters of implementation. The impact remains linked to implementation of the fees, while the company did not disclose a final outcome. On expansion, the board approved an additional investment of up to 500 crore rupees in Paytm Cloud Technologies, while the subsidiary approved an investment of up to 500 crore in Paytm Singapore. The two investments are to be made in tranches over the following twelve months to support working capital, investments and expansion. The company scheduled its second-quarter results discussion call for October 27, 2026.