Synopsis:
Shares gained after a leading AMC raised its stake by 26.31 lakh shares, boosting investor sentiment. The firm posted a turnaround in Q1FY26 with strong revenue growth, profitability, margin expansion, and optimistic growth guidance despite regulatory headwinds.
The shares of the prominent digital solution provider jumped up to 1.3 percent from its intraday low after Motilal Oswal AMC bought an additional 26.31 lakh shares in the company.
With a market capitalization of Rs 78,622.30 crore, the shares of One 97 Communications Ltd were trading at Rs 1,231.40 per share, increasing around 0.33 percent as compared to the previous closing price of Rs 1,227.30 apiece.
Deal
The shares of One 97 Communications Ltd have seen positive movement after Motilal Oswal AMC, through its various schemes, bought an additional 26.31 lakh shares (representing a 0.41% stake) in Paytm, increasing its total shareholding to 5.1577%, up from 4.7453% as of August 11.
The company delivered a strong turnaround in Q1FY26, with revenue rising 28% to ₹1,918 crore from ₹1,502 crore a year earlier. Notably, it swung from a net loss of ₹840 crore in Q1FY25 to a profit of ₹122 crore, showcasing improved operational efficiency and financial recovery.
GMV growth is fueled by UPI expansion and a widening merchant base, with management projecting 4-5x growth potential ahead. While non-UPI GMV share is shrinking, RuPay credit cards on UPI and EMI services are driving meaningful revenue. Rising credit card acceptance and increased POS device market share further strengthen the company’s payments ecosystem.
Also read: IT stock hits upper circuit after net profit jumps 55600% YoY
The company reported a strong 60% contribution margin, up from 50% last year, with guidance in the high 50s. EBITDA margin stands at 4% in Q1, but management targets 15–20% in the next 2–3 years, expecting significant upside from operating leverage despite ESOP costs now being fully included.
The company faces cyclical headwinds in consumer credit and seasonal volatility in financial services due to regulatory factors. Despite this, management remains confident in profitability, leveraging product innovation and a full-stack approach. Conservative accounting and proactive device replacement policies are being implemented to strengthen capital efficiency and sustain long-term growth momentum.
One 97 Communications Limited owns and operates the brand Paytm. Paytm is a payment app offering consumers and merchants comprehensive payment services. Its segments include Payment, Commerce, Cloud, and others. The Company is in the business of providing payment and financial services, which primarily include payment facilitator services, facilitation of consumer and merchant lending to consumers and merchants, and wealth management.
Written by Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
