Synopsis:
Paytm shares rose 3.6% to ₹1,089 after turning profitable, yet remain far below the ₹1,950 IPO price. Sustained profits and regulatory clarity are needed to reach IPO levels.
A leading Indian fintech giant specializing in digital payments and financial services has reported impressive quarterly results. With revenue surging 27.7% year-on-year and achieving a crucial turnaround from loss to profit, Let’s examines whether this positive momentum can drive its stock to finally breach the elusive Rs. 1,950 IPO listing price mark.
One 97 Communications Limited’s stock, with a market capitalisation of Rs. 68,759 crores, rose to Rs. 1,089, hitting a high of up to 3.6 percent from its previous closing price of Rs. 1,051.05. Since IPO, the stock has given a negative return of 31 percent.
Business Highlight
The company’s net revenue from payments grew by 38% year-on-year, reaching Rs. 529 crore, thanks to more premium subscription merchants and better profits from payment processing. Revenue from distributing financial services doubled to Rs. 561 crore, mainly because more merchant loans were given, ongoing income from the loan portfolio, and better collections. The company also remains the clear leader in merchant payments, with 1.3 crore (13 million) business payment devices being used by small businesses and larger enterprises.
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Q1 Financial Update
In Q1FY26, the company reported revenue of Rs. 1,918 crore, up 27.7 percent year-on-year (YoY) from Rs. 1,502 crore in Q1FY25 and showing marginal quarter-on-quarter (QoQ) growth of 0.3 percent from Rs. 1,912 crore in Q4FY25. Profit improved significantly, reaching Rs. 122 crore in Q1FY26 compared to a loss of Rs. 840 crore YoY and Rs. 545 crore loss QoQ, marking a notable turnaround from losses to profit both annually and sequentially.
The company’s operating revenue rose by 28 percent from last year to Rs. 1,918 crore, mainly because of more subscription merchants, higher overall transaction value (GMV), and increased revenue from financial services distribution. Contribution profit jumped by 52 percent to Rs. 1,151 crore, with the profit margin improving to 60 percent. This is thanks to better net payment earnings, a greater share of financial services revenue, and lower direct costs.
For the first time, the company recorded a profit at both the EBITDA level (Rs. 72 crore with a 4 percent margin) and after tax (PAT) at Rs. 123 crore, showing the benefits of using AI to make operations more efficient, keeping expenses under control, and earning more income from other sources. With a cash balance of Rs. 12,872 crore, the company is in a strong position to continue growing in merchant payments, expand in financial services, and invest in AI innovations.
Despite Paytm’s impressive turnaround to profitability, strong revenue growth, and sector leadership, the stock remains far below its IPO price of Rs. 1,950. While operational momentum and earnings visibility have improved, in order to reach the IPO level will require several more quarters of sustained profits and regulatory clarity
Written By Fazal Ul Vahab C H
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