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Paytm reported a 10.7X YoY jump in net profit to ₹225 Cr in Q2 FY27, while operating revenue rose 28% to ₹2,648 Cr. Net profit stood at ₹225 Cr, against ₹21 Cr in Q2 FY26 and ₹220 Cr in Q1 FY27. While total income for the quarter stood at ₹2,830 Cr, total expenses rose 23% YoY to ₹2,531 Cr. Fintech major Paytm’s profit for the September quarter surged to ₹225 Cr, 10.7X from ₹21 Cr in the year-ago quarter. The company’s profit for the period was also ₹5 Cr higher than the ₹220 Cr net profit raked in the June quarter. Meanwhile, its EBITDA surged 90% YoY to ₹270 Cr Operating revenue for the quarter surged 28% YoY and 8% QoQ to ₹2,648 Cr. Including other income of ₹182 Cr, Paytm’s total income for the quarter stood at ₹2,830 Cr. Meanwhile, total expenses for the quarter also increased 23% YoY to ₹2,531 Cr. Payment processing charges continued to be the biggest expense during the quarter under review and increased 28% YoY to ₹805 Cr. The company said that its indirect expenses increased 14% YoY to ₹1,209 Cr, but declined to 46% of revenue from 52% a year earlier. Software, cloud and data centre expenses rose 59% YoY to ₹211 Cr, reflecting higher AI usage, which Paytm expects to continue for another quarter. It attributed the improvement in operating leverage to AI-led efficiencies and slower growth in platform-building costs relative to revenue. The company also incorporated ₹3 Cr share of loss from a joint venture during the quarter under review and a ₹4 Cr exceptional item charge which came at the behest of “written-off obsolete capital work-in-progress”. Besides its financial statements, Paytm’s board also approved the following: - An additional ₹500 Cr investment in subsidiary Paytm Cloud Technologies Ltd (PCTL) in one or more tranches over the next twelve months. Subsequently, PCTL’s board has also approved an investment of ₹500 Cr in its subsidiary Paytm Singapore to support future requirements of working capital, investments and business expansion. - On NPCI’s recent decision to extend UPI MDR implementation to post Diwali, Paytm said that it expects an indicative uplift of about 2.5 bps in overall Payments Processing Margin. “We expect the actual outcome may stabilise in 2–3 quarters post implementation,” the company added. - The fintech major revised its default loss guarantees (DLG) for lending partner Piramal and KSF to ₹150 Cr from ₹90 Cr, up to ₹100 Cr for Vivriti and Ugro, where it had disclosed DLG of up to ₹350 Cr and Muthoot Fincorp Limited of up to ₹90 Cr. With that, here’s a look at some of the key operational updates for Paytm in the September quarter. Paytm Q2 Operational Updates The fintech company continued to expand its payments and financial services distribution business in Q2 FY27 and reported gains in payment processing margins as well as continued its AI investment spree to enhance consumer engagement. Merchant payments has continued to be the key business growth driver. Paytm’s merchant gross merchandise value (GMV) grew 26% YoY to ₹7.1 Lakh Cr in the September quarter while subscription-paying merchant base grew by 27 Lakh YoY to 1.64 Cr. The company said high merchant retention and subsequent loan distribution were contributing to higher revenue per merchant. Net payment revenue, excluding the Payment Infrastructure Development Fund (PIDF) incentive, rose 21% YoY to ₹644 Cr on a comparable basis, while reported growth stood at 8%. The company said that it received a PIDF incentive of ₹12 Cr in the quarter as against ₹74 Cr in the year-ago quarter. Therefore, its operating revenue, minus the PIDF incentive, grew 33% YoY to ₹2,636 Cr, it claimed. Meanwhile, Paytm’s payment processing margins expanded by more than four basis points due to a higher share of merchant transactions through credit cards on UPI and Paytm Postpaid, market share gains and pricing discipline. Paytm Postpaid, its credit line on UPI product, recorded higher sign-ups, increased spending per customer, improved portfolio performance and better profitability following its relaunch. The company expects the product to contribute meaningfully to revenue and EBITDA from FY28 onwards. It also reported improved monetisation through margin trading funding (MTF) and Paytm Gold. Besides, Paytm’s financial services distribution also expanded. Revenue from the business increased 49% YoY to ₹912 Cr. The number of key financial services customers rose by 2.3 Lakh, or 35%, to 8.8 Lakh. More than half of merchant loan disbursements went to repeat borrowers, reflecting continued engagement and demand among existing customers. Its merchant loan distribution is also benefiting from a wider pool of eligible borrowers, increased disbursements by lending partners and stable portfolio performance. It is also expanding into higher-ticket loans for merchants using electronic data capture (EDC) devices. Paytm also continued to gain share in consumer payments. Its monthly transacting users (MTUs) increased by 1 Cr YoY to 8.5 Cr, highest YoY jump in nearly three years. The company’s UPI gross transaction value grew 42% YoY, compared with 19% growth for the industry, marking its sixth consecutive quarter of consumer payment market share gains. This growth gives it a substantial base for the gains it could potentially realise from the UPI MDR. However, it said that its core business moat doesn’t rely on the discount rate. “Our business model is to acquire customers through payments and monetise through financial services and technology services. We do not depend on UPI MDR for profitable growth; any MDR on UPI would be an upside, not its foundation,” the company noted. Shares of Paytm ended today’s trading session 2.67% higher at ₹1,655 apiece on the BSE.
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