Paytm parent One97 Communications reported a net profit of ₹123 crore in the first quarter (Q1) of FY26. This is the company’s first clean profit quarter since its listing, with no help from one-time gains. It did post a profit in September 2024 due to the sale of its movie ticketing business, which was a non-recurring event, one time gain event. In the same period last year (Q1 FY25), the company had posted a loss of ₹840 crore. But in the latest quarter, a strong recovery was driven by higher revenue and lower costs. Revenue increased to ₹1,918 crore, which is a 28% increase compared to last year. At the same time, total expenses dropped by 18.5%, coming down to ₹2,016 crore.
The company’s core business segments, which include payments and financial services, were the main contributors to this performance. Net payment revenues for the quarter grew 38% to ₹529 crore. The fintech giant saw continued adoption of its payment devices, crossing 1.3 crore units in use by merchants. This growth reflects strong demand among small and medium businesses for digital payment solutions, which remain the firm’s largest revenue source.
Its financial services division also reported strong growth. Revenue from financial services and distribution doubled year-on-year to ₹561 crore. Much of this came from the merchant lending business, which remained active despite the pause in small-ticket personal loans following regulatory concerns. The Vijay Shekhar Sharma-led company said it benefited from both higher loan volumes and better loan collections, along with stable earnings from its default-loss guarantee products.
The company’s cost structure also improved significantly during the quarter. Employee expenses dropped by 33% to ₹643 crore, as the company restructured its workforce to focus on essential growth areas. Marketing and promotional costs were also reduced substantially (down over 55% to ₹100 crore). Additionally, because of the higher revenue and lower costs, the company’s EBITDA (excluding ESOP costs) turned positive, reaching ₹72 crore with an EBITDA margin of 4%. The company also reported a sufficient cash balance of ₹12,872 crore as of the end of June 2025.
This profitable quarter comes at a time when the fintech company is facing major legal challenges and controversies. For example, in March this year, the Enforcement Directorate (ED) issued a notice to Paytm over alleged violations of the Foreign Exchange Management Act (FEMA). The issue was related to a cross-border investment made in Singapore, which Paytm allegedly failed to report to the Reserve Bank of India (RBI). This led to a compliance notice involving ₹611 crore.
Also, the company’s founder Vijay Shekhar Sharma and his brother Ajay (along with One97 Communications) were involved in a Securities and Exchange Board of India (SEBI) investigation linked to the misallocation of ESOPs. It was alleged that Vijay and Ajay received ESOPs before Paytm’s IPO in a manner that violated rules barring major shareholders from such benefits. Following regulatory scrutiny, Vijay gave up 2.1 crore ESOPs that had been granted to him, while the company cancelled both his and Ajay’s options. As part of the settlement, Vijay was also barred from receiving any new ESOPs from any listed company for the next three years.
