Synopsis: One 97 Communications is in focus after reporting a staggering 98 percent drop in net profit YoY; however, this was mainly impacted by a one-time sale of its ticketing division to Eternal and a one-time loan write-off to its real money betting division in this quarter.
The shares of this leading online payment services provider are in focus after reporting its financial performance for this quarter. In this article, we will dive more into the details of it.
With a market capitalization of Rs 81,039 crore, the shares of One 97 Communications Ltd are currently trading at Rs 1,268.25 per share, down by 1 percent from its previous day’s closing price of Rs 1274.95 per share. In the last one year, the stock has delivered a stellar return of 66 percent, outperforming NIFTY 50’s return of 6 percent.
Q2 Highlights
Paytm has reported an operating revenue of Rs 2,061 crore in Q2 FY26, representing a 24 percent growth compared to Rs 1,659 crore in Q2 FY25. Additionally, on a quarter-on-quarter basis, it grew by 7 percent from Rs 1,918 crore.
Regarding its profitability, it reported a net profit of Rs 21 crore in Q2 FY26, a staggering decline of 98 percent as compared to Rs 930 crore in Q2 FY25. Additionally, on a quarter-on-quarter basis, it declined by 83 percent from Rs 123 crore.
The most significant factor was the presence of exceptional income that had artificially inflated its Q2 FY25 results. Paytm recorded a one-time gain of Rs 1,345 crore from selling its entertainment ticketing business (Paytm Insider) to Eternal. This created an exceptionally high base for comparison. Without this exceptional item, Q2 FY25’s actual operational loss would have been approximately Rs 495 crore.
Another reason is that, in Q2 FY26, Paytm reported an exceptional loss of Rs 190 crore, largely due to its joint venture, First Games Technology Pvt. Ltd., taking a significant hit from the new Promotion and Regulation of Online Gaming Act, 2025, which effectively bans online gaming.
With the venture now non-operational, Paytm realized that the loan it extended to this company is unlikely to be recovered. Consequently, they decided to write off the entire Rs 190 crore as an impairment loss, marking it as a one-time exceptional item in their financial results.
In conclusion, Paytm’s staggering 98 percent drop in net profit for Q2 FY26 isn’t a sign of a sudden downturn in its core business. Instead, it’s largely due to one-time accounting effects.
Last year’s profits were boosted by a hefty Rs 1,345 crore exceptional gain from the sale of its ticketing division to Eternal. This quarter, however, faced a Rs 190 crore exceptional loss from writing off its gaming joint venture following the online gaming ban. If we set aside these unusual items, Paytm’s operating performance actually showed improvement, boasting a solid 24 percent YoY revenue growth. This suggests that the company’s core payments and financial services business is holding steady, even with the fluctuations in headline profits.
Written by Satyajeet Mukherjee
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